K On January 2, 2016, Sweet Pet purchased fixtures for $50,800 cash, expecting the fixtures to remain in service for eight years. Sweet Pet has depreciated the fixtures on a straight-line basis, with $10,000 residual value. On April 30, 2018, Sweet Pet sold the fixtures for $33,400 cash. Record both depreciation expense for 2018 and sale of the fixtures on April 30, 2018. (Assume the modified half-month convention is used. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. (Enter a loss with a minus sign or parentheses.) 33400 Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss) Now, record the sale of the fixtures on April 30, 2018. Date 50800 Apr. 30 Accounts and Explanation Debit Credit
K On January 2, 2016, Sweet Pet purchased fixtures for $50,800 cash, expecting the fixtures to remain in service for eight years. Sweet Pet has depreciated the fixtures on a straight-line basis, with $10,000 residual value. On April 30, 2018, Sweet Pet sold the fixtures for $33,400 cash. Record both depreciation expense for 2018 and sale of the fixtures on April 30, 2018. (Assume the modified half-month convention is used. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. (Enter a loss with a minus sign or parentheses.) 33400 Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss) Now, record the sale of the fixtures on April 30, 2018. Date 50800 Apr. 30 Accounts and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:K
On January 2, 2016, Sweet Pet purchased fixtures for $50,800 cash, expecting the fixtures to remain in service for eight years. Sweet Pet has depreciated the fixtures
on a straight-line basis, with $10,000 residual value. On April 30, 2018, Sweet Pet sold the fixtures for $33,400 cash. Record both depreciation expense for 2018 and
sale of the fixtures on April 30, 2018. (Assume the modified half-month convention is used. Record debits first, then credits. Select the explanation on the last line of
the journal entry table.)
Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. (Enter a loss with a minus sign or parentheses.)
Market value of assets received
33400
Less: Book value of asset disposed of
Cost
Less: Accumulated Depreciation
Gain or (Loss)
Now, record the sale of the fixtures on April 30, 2018.
Date
Apr. 30
50800
***
Accounts and Explanation
Debit
Credit
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