Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Depreciation Sales Machine Value Cost Date Life Date Sold 5 yrs. Method Price $6,000 #1 $66,000 7/1/11 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1
Khalid Co. sold two machines in 2015. The following information pertains to the two machines: Purchase Useful Salvage Depreciation Sales Machine Value Cost Date Life Date Sold 5 yrs. Method Price $6,000 #1 $66,000 7/1/11 Straight- line 7/1/15 $15,000 #2 $50,000 7/1/14 5 yrs. $5,000 Double- declining- 12/31/15 $30,000 balance Declining balance rate for depreciation method double declining balance is = 0.4 Required a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal b. Calculate the book value at the date of sale and gain (loss) c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation and the sale for machine #1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Khalid Co. sold two machines in 2015. The following information pertains to the two machines:
Salvage
Date
Purchase
Useful
Sales
Depreciation
Life
Machine
Value
Cost
Method
Date Sold
Price
#1
$66,000
7/1/11
5 уrs.
$6,000
Straight-
line
7/1/15
$15,000
#2
$50,000
7/1/14
5 yrs.
$5,000
Double-
declining-
12/31/15
$30,000
balance
Declining balance rate for depreciation method double declining balance is = 0.4
Required
a. Compute the depreciation on each machine (machine 1 and 2) to the date of disposal
b. Calculate the book value at the date of sale and gain (loss)
c. Refer to machine #1, prepare the journal entries in 2015 to record 2015 depreciation
and the sale for machine #1
Date/Year BV at beginning Depr. Expense Acc. Depr BV. at the end
2014
2015
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