On January 2, 2014, Pet Haven purchased fixtures for $32,400 cash, expecting the fixtures to remain in service for eight years. Pet Haven has depreciated the fixtures on a straight-line basis, with $6,000 residual value. On May 31, 2016, Pet Haven sold the fixtures for $22,925 cash. Record both depreciation expense for 2016 and sale of the fixtures on May 31, 2016. (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.) Begin by recording the depreciation expense for 2016. Date Jul. 31 Gain or (Loss) Accounts and Explanation 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 Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Now, record the sale of the fixtures on July 31, 2016. Date Jul. 31 Debit Accounts and Explanation Credit Debit Credit

On January 2, 2014, Pet Haven purchased fixtures for $32,400 cash, expecting the fixtures to remain in service for eight years. Pet Haven has depreciated the fixtures on a straight-line basis, with $6,000 residual value. On May 31, 2016, Pet Haven sold the fixtures for $22,925 cash. Record both depreciation expense for 2016 and sale of the fixtures on May 31, 2016. (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.) Begin by recording the depreciation expense for 2016. Date Jul. 31 Gain or (Loss) Accounts and Explanation 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 Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Now, record the sale of the fixtures on July 31, 2016. Date Jul. 31 Debit Accounts and Explanation Credit Debit Credit

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Description: On January 2, 2014, Pet Haven purchased fixtures for $32,400 cash, expecting the fixtures to remain in service for eight years. Pet Haven has depreciated the fixtures on a straight-line basis, with$6,000 residual value. On May 31, 2016, Pet Haven so

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Question

On January 2, 2014, Pet Haven purchased fixtures for $32,400 cash, expecting the fixtures to remain in service for eight years. Pet Haven has depreciated the fixtures on a straight-line basis, with
$6,000 residual value. On May 31, 2016, Pet Haven sold the fixtures for $22,925 cash. Record both depreciation expense for 2016 and sale of the fixtures on May 31, 2016. (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.)
Begin by recording the depreciation expense for 2016.
Date
Jul. 31
Gain or (Loss)
Accounts and Explanation
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
Less: Book value of asset disposed of
Cost
Less: Accumulated Depreciation
Now, record the sale of the fixtures on July 31, 2016.
Date
Jul. 31
Debit
Accounts and Explanation
Credit
Debit
Credit

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