The property, plant, and equipment section of the Jasper Company's December 31, 2020, balance sheet contained the following: Property, plant, and equipment: Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation $127,000 $ 752,000 (235,000) 179,250 517,000 Total property, plant, and equipment The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $47,000 for the building is anticipated. The equipment is comprised of the following three machines: Machine 101 102 Date Acquired 1/1/2018 6/30/2019 9/1/2020 Residual Value $ 7,700 8,700 3,700 Life (in Years) 8. Cost $ 63,700 76,600 38,950 7 103 10 The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $47,000. Early in 2021, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero. Required: 1. Calculate the accumulated depreciation on the equipment at December 31, 2020. 2. Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale. 3. Calculate the galn or loss on the sale of machine 102. O Dronare the journal entry for the sale of machine 102. rorord denreciation on the building and remaining equipment.
The property, plant, and equipment section of the Jasper Company's December 31, 2020, balance sheet contained the following: Property, plant, and equipment: Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation $127,000 $ 752,000 (235,000) 179,250 517,000 Total property, plant, and equipment The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $47,000 for the building is anticipated. The equipment is comprised of the following three machines: Machine 101 102 Date Acquired 1/1/2018 6/30/2019 9/1/2020 Residual Value $ 7,700 8,700 3,700 Life (in Years) 8. Cost $ 63,700 76,600 38,950 7 103 10 The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $47,000. Early in 2021, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero. Required: 1. Calculate the accumulated depreciation on the equipment at December 31, 2020. 2. Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale. 3. Calculate the galn or loss on the sale of machine 102. O Dronare the journal entry for the sale of machine 102. rorord denreciation on the building and remaining equipment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The property, plant, and equipment section of the Jasper Company's December 31, 2020, balance sheet contained the following:
Property, plant, and equipment:
Land
$127,000
Building
Less: Accumulated depreciation
Equipment
Less: Accumulated depreciation
Total property, plant, and equipment
$ 752,000
(235,000)
179, 250
517,000
The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $47,000 for
the building is anticipated.
The equipment is comprised of the following three machines:
Residual
Value
$7,700
8,700
3,700
Life (in
Years)
8.
Machine
101
Date Acquired
1/1/2018
6/30/2019
9/1/2020
Cost
$ 63,700
76,600
38,950
102
7
103
10
The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $47,000.
Early in 2021, the useful life of machine 101 was revised to five years in total, and the residual value was revised to zero.
Required:
1. Calculate the accumulated depreclation on the equipment at December 31, 2020.
2. Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale.
3. Calculate the gain or loss on the sale of machine 102.
4. Prepare the journal entry for the sale of machine 102.
5. Prepare the 2021 year-end journal entries to record depreciation on the building and remaining equipment.
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