Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations: Disposal with no gain no loss : When the asset is disposed with no consideration received. Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation ). Disposal with loss: When the asset is disposed for less than its book value. Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below: Depreciation = ( Cost of the asset − Residual value ) Estimated useful life of the asset the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

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Answer 1

Question

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

b)

To determine

the book value of the equipment on January 1, 2016.

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

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The following were selected from among the transactions completed by Babcock Company during November of the current year: Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600. 5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned merchandise with an invoice amount of $13,500 ($18,000 list price less trade discount of 25%) purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise with a list price of $236,000 to customers who used VISA and who redeemed $8,000 of pointof- sale coupons. The cost…

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Answer 2

Question

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

b)

To determine

the book value of the equipment on January 1, 2016.

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Expert Solution & Answer

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Answer 3

Question

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

b)

To determine

the book value of the equipment on January 1, 2016.

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

b)

To determine

the book value of the equipment on January 1, 2016.

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

b)

To determine

the book value of the equipment on January 1, 2016.

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Answer 6

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 7

Chapter 10, Problem 10.18EX

a)

To determine

Disposal of Assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the residual value is shown as below:

Depreciation = (Cost of the asset−Residual value)Estimated useful life of the asset

the annual amount of depreciation for the years1-3 using the straight-line method of depreciation.

Answer 8

b)

To determine

the book value of the equipment on January 1, 2016.

Answer 9

b)

To determine

the book value of the equipment on January 1, 2016.

Answer 10

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

Answer 11

c)

To determine

To record: the journal entry for the sale of the equipment on January 3, 2016.

Answer 12

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Answer 13

d)

To determine

To record: the journal entry for the sale of the equipment on January 3 2016.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 10 - ONeil Office Supplies has a fleet of automobiles...Ch. 10 - Prob. 2DQ Ch. 10 - Prob. 3DQ Ch. 10 - Prob. 4DQ Ch. 10 - Immediately after a used truck is acquired, a new...Ch. 10 - Keyser Company purchased a machine that has a...Ch. 10 - Is it necessary for a business to use the same...Ch. 10 - Prob. 8DQ Ch. 10 - For some of the fixed assets of a business, the...Ch. 10 - a. Over what period of time should the cost of a...

Solution Summary: The author explains the straight-line method of depreciation, wherein the same amount is allocated every year over the estimated useful life of an asset.

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the book value of the equipment on January 1, 2016.

To record: the journal entry for the sale of the equipment on January 3, 2016.

To record: the journal entry for the sale of the equipment on January 3 2016.

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