Mercury Inc. purchased equipment in 2019 at a cost of $207,000. The equipment was expected to produce 570,000 units over the next five years and have a residual value of $36,000. The equipment was sold for $106,600 part way through 2021. Actual production In each year was: 2019 - 82,000 units; 2020 - 130,000 units: 2021 - 66,000 units. Mercury uses units-of-production depreclation, and all depreciation has been recorded through the disposal date. Requlred: 1. Calculate the gain or loss on the sale. 2. Prepare the Journal entry to record the sale. 3. Assuming that the equipment was Instead sold for $138,600, calculate the galn or loss on the sale. 4. Prepare the Journal entry to record the sale In requirement 3.

Mercury Inc. purchased equipment in 2019 at a cost of $207,000. The equipment was expected to produce 570,000 units over the next five years and have a residual value of $36,000. The equipment was sold for $106,600 part way through 2021. Actual production In each year was: 2019 - 82,000 units; 2020 - 130,000 units: 2021 - 66,000 units. Mercury uses units-of-production depreclation, and all depreciation has been recorded through the disposal date. Requlred: 1. Calculate the gain or loss on the sale. 2. Prepare the Journal entry to record the sale. 3. Assuming that the equipment was Instead sold for $138,600, calculate the galn or loss on the sale. 4. Prepare the Journal entry to record the sale In requirement 3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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