The following are selected transactions affecting the Campbell Company's long-term assets during the 2014 fiscal year. Campbell's year-end is December 31. Jan 1 Renovated an office building and expanded its capacity at a cost of $200,000. This building was purchased on January 1, 2009 for $530,000 with an estimated useful life of 20 years, a salvage of $30,000 and being depreciated on a straight-line basis. The renovations increased the salvage value of the building to $50,000. Jun 30 Sold a piece of equipment that was purchased on January 1, 2012. The equipment cost $60,000, and had a useful life of 8 years with a $6,000 salvage value and was being depreciated using the double-declining balance method. The equipment was sold for $36,000. In regards to the January 1 transaction, this event should be accounted for as a(n): O Revenue Expenditure Capital Expenditure O Operating Expenditure O Financing Expenditure QUESTION 16 Referring to the information presented above in #15, record the June 30 journal entry to recognize the sale of the equipment. O Debit Cash 36,000; debit Accumulated Depreciation 30,469; credit Equipment 60,000; credit Gain on Sale 6,469 O Debit Cash 36,000; debit Accumulated Depreciation 26,250; credit Equipment 60,000; credit Gain on Sale 2,250 Debit Equipment 60,000; debit Loss on Sale 2,250; credit Accumulated Depreciation 26,250, credit cash 36,000 Debit Cash 36,000; debit Accumulated Depreciation 24,000; credit Equipment 60,000
The following are selected transactions affecting the Campbell Company's long-term assets during the 2014 fiscal year. Campbell's year-end is December 31. Jan 1 Renovated an office building and expanded its capacity at a cost of $200,000. This building was purchased on January 1, 2009 for $530,000 with an estimated useful life of 20 years, a salvage of $30,000 and being depreciated on a straight-line basis. The renovations increased the salvage value of the building to $50,000. Jun 30 Sold a piece of equipment that was purchased on January 1, 2012. The equipment cost $60,000, and had a useful life of 8 years with a $6,000 salvage value and was being depreciated using the double-declining balance method. The equipment was sold for $36,000. In regards to the January 1 transaction, this event should be accounted for as a(n): O Revenue Expenditure Capital Expenditure O Operating Expenditure O Financing Expenditure QUESTION 16 Referring to the information presented above in #15, record the June 30 journal entry to recognize the sale of the equipment. O Debit Cash 36,000; debit Accumulated Depreciation 30,469; credit Equipment 60,000; credit Gain on Sale 6,469 O Debit Cash 36,000; debit Accumulated Depreciation 26,250; credit Equipment 60,000; credit Gain on Sale 2,250 Debit Equipment 60,000; debit Loss on Sale 2,250; credit Accumulated Depreciation 26,250, credit cash 36,000 Debit Cash 36,000; debit Accumulated Depreciation 24,000; credit Equipment 60,000
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
Section: Chapter Questions
Problem 22E
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Depreciation Methods
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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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Transcribed Image Text:USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (2) QUESTIONS:
The following are selected transactions affecting the Campbell Company's long-term assets during the 2014 fiscal year. Campbell's year-end
is December 31.
Jan 1
Renovated an office building and expanded its capacity at a cost of $200,000. This building was purchased on January 1, 2009 for
$530,000 with an estimated useful life of 20 years, a salvage of $30,000 and being depreciated on a straight-line basis. The renovations increased the
salvage value of the building to $50,000.
Jun 30 Sold a piece of equipment that was purchased on January 1, 2012. The equipment cost $60,000, and had a useful life of 8 years with a
$6,000 salvage value and was being depreciated using the double-declining balance method. The equipment was sold for $36,000.
In regards to the January 1 transaction, this event should be accounted for as a(n):
Revenue Expenditure
O Capital Expenditure
Operating Expenditure
Financing Expenditure
QUESTION 16
Referring to the information presented above in #15, record the June 30 journal entry to recognize the sale of the equipment.
Debit Cash 36,000; debit Accumulated Depreciation 30,469; credit Equipment 60,000; credit Gain on Sale 6,469
Debit Cash 36,000; debit Accumulated Depreciation 26,250; credit Equipment 60,000; credit Gain on Sale 2,250
Debit Equipment 60,000; debit Loss on Sale 2,250; credit Accumulated Depreciation 26,250, credit cash 36,000
Debit Cash 36,000; debit Accumulated Depreciation 24,000; credit Equipment 60,000
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