On January 2, 2016, King Pet purchased fixtures for $38,100 cash, expecting the fixtures to remain in service for nine years. King Pet has depreciated the fixtures on a straight-line basis, with $3,000 residual value. On August 31, 2018, King Pet sold the fixtures for $22,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on August 31, 2018
On January 2, 2016, King Pet purchased fixtures for $38,100 cash, expecting the fixtures to remain in service for nine years. King Pet has depreciated the fixtures on a straight-line basis, with $3,000 residual value. On August 31, 2018, King Pet sold the fixtures for $22,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on August 31, 2018
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 9MCQ: Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a...
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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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![On January 2, 2016, King Pet purchased fixtures for $38,100 cash, expecting the fixtures to remain in service for nine years.
King Pet has depreciated the fixtures on a straight-line basis, with $3,000 residual value. On August 31, 2018, King Pet sold
the fixtures for $22,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on August 31, 2018](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4daf5fa6-4e1e-4e59-849f-31b1cb22b7e6%2Fa7647527-03dc-485e-b53e-aca0eee20fbe%2Fprx3eps_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 2, 2016, King Pet purchased fixtures for $38,100 cash, expecting the fixtures to remain in service for nine years.
King Pet has depreciated the fixtures on a straight-line basis, with $3,000 residual value. On August 31, 2018, King Pet sold
the fixtures for $22,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on August 31, 2018
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