Skysong Company owns equipment that cost $85,000 when purchased on January 1, 2019. It has been depreciated using the straight- line method based on an estimated salvage value of $8,500 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Skysong Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter O for the amounts) (a) (b) (c) (d) (e) ( SR. Account Titles and Explanation (a) (b) (c) (d) Sold for $49,000 on January 1, 2022. Sold for $49,000 on April 1, 2022. Sold for $18,000 on January 1, 2022. Sold for $18,000 on September 1, 2022 Repeat (a), assuming Skysong uses double-declining balance depreciation. Repeat (c), assuming Skysong uses double-declining balance depreciation (e) (f) Cash Accumulated Depreciation Equipment Gain on Disposal of Plant Assets (b) Depreciation Expense Equipment Depreciation Expense Accumulated Depreciation Equipment Accumulated Depreciation Equipment (To record depreciation) Cash Accumulated Depreciation Equipment gain Equipment (To record sale of Equipment) Cash (To record depreciation) (To record sale of Equipment) Debit Credit
Skysong Company owns equipment that cost $85,000 when purchased on January 1, 2019. It has been depreciated using the straight- line method based on an estimated salvage value of $8,500 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Skysong Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter O for the amounts) (a) (b) (c) (d) (e) ( SR. Account Titles and Explanation (a) (b) (c) (d) Sold for $49,000 on January 1, 2022. Sold for $49,000 on April 1, 2022. Sold for $18,000 on January 1, 2022. Sold for $18,000 on September 1, 2022 Repeat (a), assuming Skysong uses double-declining balance depreciation. Repeat (c), assuming Skysong uses double-declining balance depreciation (e) (f) Cash Accumulated Depreciation Equipment Gain on Disposal of Plant Assets (b) Depreciation Expense Equipment Depreciation Expense Accumulated Depreciation Equipment Accumulated Depreciation Equipment (To record depreciation) Cash Accumulated Depreciation Equipment gain Equipment (To record sale of Equipment) Cash (To record depreciation) (To record sale of Equipment) Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Skysong Company owns equipment that cost $85,000 when purchased on January 1, 2019. It has been depreciated using the straight-
line method based on an estimated salvage value of $8,500 and an estimated useful life of 5 years. Depreciation expense adjustments
are recognized annually.
Instructions:
Prepare Skysong Company's journal entries to record the sale of the equipment in these four independent situations. Update
depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not
indent manually List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter for the
amounts)
(a)
(b)
(c)
(d)
(e)
(3)
SR. Account Titles and Explanation
(a)
(b)
(b)
(d)
Sold for $49,000 on January 1, 2022.
Sold for $49,000 on April 1, 2022.
Sold for $18,000 on January 1, 2022.
Sold for $18,000 on September 1, 2022
Repeat (a), assuming Skysong uses double-declining balance depreciation.
Repeat (c), assuming Skysong uses double-declining balance depreciation.
(e)
(f)
Cash
Accumulated Depreciation Equipment
Gain on Disposal of Plant Assets
Equipment
Depreciation Expense
Accumulated Depreciation Equipment
Depreciation Expense
Accumulated Depreciation Equipment
(To record depreciation)
Cash
Accumulated Depreciation Equipment
(c) Cash
Equipment
(To record sale of Equipment)
(To record depreciation)
(To record sale of Equipment)
Debit
Credit
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