Problem 10-6A (Algo) Part 3 No Required information Problem 10-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $22,000 cash and (b) it is sold for $88,000 cash. 1 Onslow Company purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 2 Date December 31 December 31 Cash > Answer is not complete. Cash General Journal Accumulated depreciation Machinery Loss on sale of machinery Machinery Accumulated depreciation-Machinery Machinery Gain on sale of machinery ›› › › › › › › ✓ ✓ ✓ ✓ ✓ Debit 22,000✔ 88,000✔ 204,000 x Credit 142,800 x 192,000 X 204,000✔ 142,800 X

Problem 10-6A (Algo) Part 3 No Required information Problem 10-6A (Algo) Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] 3. Prepare journal entries to record the machine's disposal under each separate situation: (a) it is sold for $22,000 cash and (b) it is sold for $88,000 cash. 1 Onslow Company purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. 2 Date December 31 December 31 Cash > Answer is not complete. Cash General Journal Accumulated depreciation Machinery Loss on sale of machinery Machinery Accumulated depreciation-Machinery Machinery Gain on sale of machinery ›› › › › › › › ✓ ✓ ✓ ✓ ✓ Debit 22,000✔ 88,000✔ 204,000 x Credit 142,800 x 192,000 X 204,000✔ 142,800 X

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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Brief Exercise 8-5 (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5 Mix & Match Company sold office equipment with a cost of $48,600 and accumulated depreciation of $33,000 for $28,000 cash. Required: a. What is the amount of gain or loss on the disposal? b. How would the sale affect net income (increase, decrease, no effect)? c. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect)? d. How would the event affect the statement of cash flows (inflow, outflow, no effect)? a. b. Effect of sale on net income c. Effect of sale on total assets d. Effect of sale on statement of cash flows
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Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.] 1 2 3 4 5 6 University Car Wash purchased new soap dispensing equipment that cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year Year 1 2 3 4 SSVI 5 6 Problem 7-5A (Algo) Part 2 2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.) Hours Used 2,900 1,800 1,900 2,100 1,900 1,900 Depreciation Expense UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining-Balance End of Year Amounts Accumulated Depreciation Book Value Help
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K Exercise 8-12A (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5 Un Company sold office equipment with a cost of $37,110 and accumulated depreciation of $32,541 for $6,720. Required a. What is the book value of the asset at the time of sale? b. What is the amount of gain or loss on the disposal? c. How would the sale affect net income (increase, decrease, no effect) and by how much? d. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect) and by how much? e. How would the event affect the statement of cash flows (increase, decrease, no effect) and in what section? a. Book value b. Gain (loss) on sale c. Net income would d. Total assets would e. Effect on statement of cash flows e. Section Prey 7 of 11 Next >
Required information Problem 7-5A (Algo) Determine depreciation under three methods (LO7-4) [The following information applies to the questions displayed below.) University Car Wash purchased new soap dispensing equipment that cost $219,000 including installation. The company estimates that the equipment will have a residual value of $19,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 Hours Used 2,800 1,400 1,500 2,500 2,300 2,000 4 Problem 7-5A (Algo) Part 1 Required: 1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.) UNIVERSITY CAR WASH Depreciation Schedule-Straight-Line End of Year Amounts Depreciation Expense Accumulated Depreciation Year Book Value