solve it plz Frank and Oonagh each own and operate separate companies. Each boug

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solve it plz

Frank and Oonagh each own and operate separate companies. Each bought a new piece of equipment costing $56,000 on January 2,2010. Each piece of equipment had an estimated useful life of 4 years and residual value of $8,000. Frank used straight-line depreciation and Oonagh used double-declining-balance depreciation. On December 31, 2012, each of them sold their equipment for $15,000. Prepare a schedule showing the depreciation that Frank would record year (Remember Frank is using the straight line method of depreciation Prepare the journal entry to record the depreciation for the first year only for Oonagh. Assuming the depreciation was recorded up to the end of 2012. Prepare the journal entry to record the sale of the asset on December 31, 2012 Oonagh. Are the gain or loss recorded by Frank & Oonagh different and if so are they different.

Explanation / Answer

SEPRECIATION FOR FRANK UNDER STRAIGHT LINE METHOD = (56000-8000)/4

=12000

DATE

COST

DEPRECIATION EXPENSE

ACCUMULATED DEPRECIATION

NET BALANCE

DEC 31/10

56000

12000

12000

44000

DEC 31/11

56000

12000

24000

32000

DEC 31/12

56000

12000

36000

20000

DEC 31/13

56000

12000

48000

8000

JOURNAL ENTRY FOR THE FIRST YEAR FOR FRANK

DEBIT DEPRECIATION 12000

CREDIT ACCUMULATED DEPRECIATION 12000

SEPRECIATION FOR FRANK UNDER STRAIGHT LINE METHOD = (56000-8000)/4

=12000

DATE

COST

DEPRECIATION EXPENSE

ACCUMULATED DEPRECIATION

NET BALANCE

DEC 31/10

56000

12000

12000

44000

DEC 31/11

56000

12000

24000

32000

DEC 31/12

56000

12000

36000

20000

DEC 31/13

56000

12000

48000

8000

JOURNAL ENTRY FOR THE FIRST YEAR FOR FRANK

DEBIT DEPRECIATION 12000

CREDIT ACCUMULATED DEPRECIATION 12000

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