Swift Manufacturing Inc. acquired equipment at the beginning of the year at a cost of $648,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 10 years and an estimated residual value of $48,000. a. What was the depreciation for the first year? b. Using the rounded amount from Part a in your computation, determine the gain (loss) on the sale of the equipment, assuming it was sold at the end of year nine for $105,000. c. Journalize the entry to record the sale of the equipment.

Swift Manufacturing Inc. acquired equipment at the beginning of the year at a cost of $648,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 10 years and an estimated residual value of $48,000. a. What was the depreciation for the first year? b. Using the rounded amount from Part a in your computation, determine the gain (loss) on the sale of the equipment, assuming it was sold at the end of year nine for $105,000. c. Journalize the entry to record the sale of the equipment.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 2RE: Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual...

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Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Albany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.
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