Sale of Asset Equipment acquired on January 9, 20Y3, at a cost of $50 residual value of $80,480, and is depreciated by the strai
Sale of Asset Equipment acquired on January 9, 20Y3, at a cost of $50 residual value of $80,480, and is depreciated by the strai
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sale of Asset
Equipment acquired on January 9, 20Y3, at a cost of $503,000, has an estimated useful life of 17 years, an estimated
residual value of $80,480, and is depreciated by the straight-line method.
a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim
calculations and final answer to the nearest dollar.
Enter account decreases, cash outflows, and the income statement effects that decrease net income as
negative amounts. However, for contra asset accounts, enter account increases as a negative value. Round
annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or
activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.
1. Assuming that the equipment was sold on July 1, 2018, for $176,050, illustrate the effects on the accounts and
financial statement of depreciation for the six months until the sale date.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a4eeb32-1652-4622-80f9-de25f0a55277%2Fc1f9a2c3-6824-4489-aad4-16739a1a665b%2F6x6xrde_processed.jpeg&w=3840&q=75)
Transcribed Image Text:=
Sale of Asset
Equipment acquired on January 9, 20Y3, at a cost of $503,000, has an estimated useful life of 17 years, an estimated
residual value of $80,480, and is depreciated by the straight-line method.
a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim
calculations and final answer to the nearest dollar.
Enter account decreases, cash outflows, and the income statement effects that decrease net income as
negative amounts. However, for contra asset accounts, enter account increases as a negative value. Round
annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or
activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.
1. Assuming that the equipment was sold on July 1, 2018, for $176,050, illustrate the effects on the accounts and
financial statement of depreciation for the six months until the sale date.
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