On September 30, 2022, the company sold old equipment for $96,600. The equipment was purchased on January 1, 2020, for 201,600 and was estimated to have a $33,600 salvage value at the end of its 5-year life. Depreciation on the equipment has been ecorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Account Titles and Explanation te 30,2022 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense for the first 9 months of 2022) Cash Accumulated Depreciation-Equipment Loss on Disposal of Plant Assets Equipment (To recorte Debit 25200 DOOG 96600 Credit 25200 100 45000 109200

On September 30, 2022, the company sold old equipment for $96,600. The equipment was purchased on January 1, 2020, for 201,600 and was estimated to have a $33,600 salvage value at the end of its 5-year life. Depreciation on the equipment has been ecorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Account Titles and Explanation te 30,2022 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense for the first 9 months of 2022) Cash Accumulated Depreciation-Equipment Loss on Disposal of Plant Assets Equipment (To recorte Debit 25200 DOOG 96600 Credit 25200 100 45000 109200

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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Mango Company purchased a delivery truck for $66,000 on January 2, 2021. The useful life was estimated to be 5 years and the salvage value was estimated at $26,000. The truck is depreciated using the straight-line method. When preparing adjusting entries for December 31, 2023, it was discovered that the salvage value had not been deducted when computing depreciation for 2021 and 2022. The correct amount of deprecation was recorded for 2023. What additional journal entry should be made? Answer a. Debit Accumulated Depreciation for $10,400 and credit Retained Earnings for $10,400. b. Debit Accumulated Deprecation for $15,600 and credit Depreciation Expense for $15,600. c. Debit Accumulated Deprecation for $16,000 and credit Retained Earnings for $16,000. d. No additional entry should be made as the error will be accounted for in the current period and prospectively.
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