The following is a tabular summary 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 $90. Part of the equipment was sold on the last day of the current year for cash proceeds. Use the information in the tabular summary to derive the missing amounts: (a) Purchase of equipment on January 1. What was the cash paid? (b) Depreciation recorded on December 31. What was the depreciation expense? (c) Sale of part of the equipment on December 31. What was the gain on disposal Assets = Liabilities + Stockholders' Equity Retained Earnings Cash + Equipment - Accum. Depr. - Equip. = + Common Stock + Revenue - Expense - Dividend Jan. 1 (a) $ $1,150 Dec. 31 $106 (b) $ Dec. 31 446 -426 40 (c) $
The following is a tabular summary relating to equipment that was purchased for cash by a company on the first day of the current year. The equipment was
Use the information in the tabular summary to derive the missing amounts:
(a) Purchase of equipment on January 1. What was the cash paid?
(b) Depreciation recorded on December 31. What was the depreciation expense?
(c) Sale of part of the equipment on December 31. What was the gain on disposal
Assets
=
Liabilities
+
Cash
+
Equipment
-
Accum. Depr. - Equip.
=
+
Common Stock
+
Revenue
-
Expense
-
Dividend
Jan. 1
(a) $
$1,150
Dec. 31
$106
(b) $
Dec. 31
446
-426
40
(c) $
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