Shown below are the T-accounts relating to equipment that was purchased for cash by a company on the first day of the current year. The equipment was depreciated on a straight-line basis with an estimated useful life of 10 years and a salvage value of $190. Part of the equipment was sold on the last day of the current year for cash proceeds. Cash Jan. 1 (a) Dec. 31 540 Equipment Jan. 1 1,190 Dec. 31 530 Accumulated Depreciation—Equipment Dec. 31 100 Dec. 31 130 Depreciation Expense Dec. 31 (b) Gain on Disposal of Plant Assets Dec. 31 (c) (a) Prepare the journal entries to record purchase of equipment on January 1. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record purchase of equipment on January 1 enter a debit amount enter a credit amount enter an account title to record purchase of equipment on January 1 enter a debit amount enter a credit amount What was the cash paid? Cash Dec. 31 540 Jan. 1 enter the amount of cash paid on January 1

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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Cash
		Jan. 1	(a)
Dec. 31	540

Equipment
Jan. 1	1,190
		Dec. 31	530

Accumulated Depreciation—Equipment
		Dec. 31	100
Dec. 31	130

Depreciation Expense
Dec. 31	(b)

Gain on Disposal of Plant Assets
		Dec. 31	(c)

(a)

Prepare the journal entries to record purchase of equipment on January 1. (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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	enter an account title to record purchase of equipment on January 1	enter a debit amount	enter a credit amount
	enter an account title to record purchase of equipment on January 1	enter a debit amount	enter a credit amount

What was the cash paid?

Cash
Dec. 31	540	Jan. 1	enter the amount of cash paid on January 1

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