Rayne Inc. purchased equipment in 2019 at a cost of $428,000. The equipment was expected to produce 580,000 units over the next five years and have a residual value of $33,000. The equipment was sold for $252,600 part way through 2021. Actual production in each year was: 2019 = 83,000 units; 2020 = 133,000 units; 2021 = 64,000 units. Rayne uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale.
Rayne Inc. purchased equipment in 2019 at a cost of $428,000. The equipment was expected to produce 580,000 units over the next five years and have a residual value of $33,000. The equipment was sold for $252,600 part way through 2021. Actual production in each year was: 2019 = 83,000 units; 2020 = 133,000 units; 2021 = 64,000 units. Rayne uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rayne Inc. purchased equipment in 2019 at a cost of $428,000. The equipment was expected to produce 580,000 units over the next five years and have a residual value of $33,000. The equipment was sold for $252,600 part way through 2021. Actual production in each year was: 2019 = 83,000 units; 2020 = 133,000 units; 2021 = 64,000 units. Rayne uses units-of-production
Required:
1. Calculate the gain or loss on the sale.
2. Prepare the
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