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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
Related questions
Question
1a. What would be the amount on the sale? Was it a gain or a loss?
1b. What would the
2a. Assuming that the equipment was instead sold for $138,600, calculate the gain or loss on the sale.
2b. What would the journal be for the sale in 2a?
![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.
Required:
1. Calculate the galn 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 gain or loss on the sale.
4. Prepare the Journal entry to record the sale in requirement 3.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F10b0a167-05b2-4876-8dc8-efca224cb278%2Fac99e08c-fe5e-4ddd-aafd-b7fce57d392d%2Fqsfmp3i_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
Required:
1. Calculate the galn 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 gain or loss on the sale.
4. Prepare the Journal entry to record the sale in requirement 3.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 6 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College