Instructions Equipment was acquired at the beginning of the year at a cost of $562,500. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 9 years and an estimated residual value of $49,785. a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. b. Assuming the equipment was sold at the end of the second year for $557,317, determine the gain or loss on the sale of the equipment. c. Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles. Journal 1 2 3 c. Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles 4 DATE Dec. 31 Cash DESCRIPTION Accumulated Depreciation-Equipment Gain on Sale of Equipment Equipment X JOURNAL First Questions a. What was the depreciation for the first year? Round your intermediate calculations to 4 decimal places. Round the depreciation for the year to the nearest whole dollar. $ b. Assuming the equipment was sold at the end of the second year for $557,317, determine the gain or loss on the sale of the equipment. $217,020 gain POST. REF. DEBIT CREDIT ACCOUNTING EQUATION ASSETS PAGE 1 LIABILITIES X EQUITY X Chart of Accounts 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventor 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Deprecia Delivery Truck 125 Equipment 126 Accumulated Deprecia Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
![Instructions
Equipment was acquired at the beginning of the year at a cost of $562,500. The
equipment was depreciated using the double-declining-balance method based on an
estimated useful life of 9 years and an estimated residual value of $49,785.
a. What was the depreciation for the first year? Round your intermediate
calculations to 4 decimal places. Round the depreciation for the year to
the nearest whole dollar.
b. Assuming the equipment was sold at the end of the second year for
$557,317, determine the gain or loss on the sale of the equipment.
c. Journalize the entry on December 31 to record the sale. Refer to the Chart
of Accounts for exact wording of account titles.
Journal
1
2
3
c. Journalize the entry on December 31 to record the sale. Refer to the Chart of Accounts for exact wording of account titles.
4
O
DATE
I
Dec. 31
Cash
DESCRIPTION
Accumulated Depreciation-Equipment
Gain on Sale of Equipment
Equipment
JOURNAL
X
O
First Questions
a. What was the depreciation for the first year? Round your intermediate calculations to 4.
decimal places. Round the depreciation for the year to the nearest whole dollar.
$
b. Assuming the equipment was sold at the end of the second year for $557,317,
determine the gain or loss on the sale of the equipment. $217,020 gain
POST. REF.
DEBIT
All work saved.
CREDIT
ACCOUNTING EQUATION
ASSETS
PAGE 1
LIABILITIES
X
EQUITY
X
Chart of Accounts
112 Accounts Receivable
114 Interest Receivable
115 Notes Receivable
116 Merchandise Inventory
117 Supplies
119 Prepaid Insurance
120 Land
123 Delivery Truck
124 Accumulated Depreciation
Delivery Truck
125 Equipment
126 Accumulated Depreciation
Equipment
130 Mineral Rights
131 Accumulated Depletion
132 Goodwill
133 Patents
LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
Email I](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e4e5146-969d-4643-8e1a-977cd9815aba%2F365ebd23-6215-4b41-ada0-927503b7fd59%2Fti6zl5_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
![College Accounting, Chapters 1-27](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)