wh.ca/d21/le/content/126096/viewContent/7921257/Viewmitaltar CETILSituation 4: On March 31, 2017, Wayside Corporation purchased a new piece ofmanufacturing equipment for $1,615,000. At that time, the estimated useful life of theequipment was five years, with a residual value of $325,000. On August 1, 2020, due toincreased competition causing a decreased selling price for its product, Waysidedecided to discontinue the product. By December 31, 2020, there was a formal plan inplace to sell the equipment, and the equipment qualified for classification as held forsale. At December 31, 2020, the equipment's fair value less costs to sell was $260,000.Due to matters beyond Wayside's control, a potential sale of the equipment fell throughin 2021, although consumer confidence in Wayside's product increased significantlybecause of reported defects in its competitors' products. The equipment remainedclassified as held for sale at December 31, 2021, when the equipment's fair value lesscosts to sell increased to $725,000. Wayside uses the straight-line method to depreciateits equipment.Required #4: Prepare all journal entries required for the years ending December 31,2020, and December 31, 2021.• When calculating Partial Depreciation, Use nearest month.

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Description: wh.ca/d21/le/content/126096/viewContent/7921257/Viewmitaltar CETILSituation 4: On March 31, 2017, Wayside Corporation purchased a new piece ofmanufacturing equipment for $1,615,000. At that time, the estimated useful life of theequipment was five ye

Straight-Line Method -One of the most common techniques of depreciation is the straight-line…

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Accounting

Situation 4: On March 31, 2017, Wayside Corporation purchased a new piec manufacturing equipment for $1,615,000. At that time, the estimated useful lif equipment was five years, with a residual value of $325,000. On August 1, 20 increased competition causing a decreased selling price for its product, Waysi decided to discontinue the product. By December 31, 2020, there was a forma place to sell the equipment, and the equipment qualified for classification as h sale. At December 31, 2020, the equipment's fair value less costs to sell was Due to matters beyond Wayside's control, a potential sale of the equipment fell in 2021, although consumer confidence in Wayside's product increased signifi because of reported defects in its competitors' products. The equipment remail classified as held for sale at December 31, 2021, when the equipment's fair va costs to sell increased to $725,000. Wayside uses the straight-line method to c its equipment

Situation 4: On March 31, 2017, Wayside Corporation purchased a new piec manufacturing equipment for $1,615,000. At that time, the estimated useful lif equipment was five years, with a residual value of $325,000. On August 1, 20 increased competition causing a decreased selling price for its product, Waysi decided to discontinue the product. By December 31, 2020, there was a forma place to sell the equipment, and the equipment qualified for classification as h sale. At December 31, 2020, the equipment's fair value less costs to sell was Due to matters beyond Wayside's control, a potential sale of the equipment fell in 2021, although consumer confidence in Wayside's product increased signifi because of reported defects in its competitors' products. The equipment remail classified as held for sale at December 31, 2021, when the equipment's fair va costs to sell increased to $725,000. Wayside uses the straight-line method to c its equipment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

wh.ca/d21/le/content/126096/viewContent/7921257/View
mitaltar CETIL
Situation 4: On March 31, 2017, Wayside Corporation purchased a new piece of
manufacturing equipment for $1,615,000. At that time, the estimated useful life of the
equipment was five years, with a residual value of $325,000. On August 1, 2020, due to
increased competition causing a decreased selling price for its product, Wayside
decided to discontinue the product. By December 31, 2020, there was a formal plan in
place to sell the equipment, and the equipment qualified for classification as held for
sale. At December 31, 2020, the equipment's fair value less costs to sell was $260,000.
Due to matters beyond Wayside's control, a potential sale of the equipment fell through
in 2021, although consumer confidence in Wayside's product increased significantly
because of reported defects in its competitors' products. The equipment remained
classified as held for sale at December 31, 2021, when the equipment's fair value less
costs to sell increased to $725,000. Wayside uses the straight-line method to depreciate
its equipment.
Required #4: Prepare all journal entries required for the years ending December 31,
2020, and December 31, 2021.
• When calculating Partial Depreciation, Use nearest month.

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