Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $13
ID: 2396660 • Letter: E
Question
Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $139,230, has an estimated useful life of 17 years, has an estimated residual value of $9,350, and is depreclated by the straight-line method a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for 101,695 1· Journalize the entry to record depreciation for the three months until the sale date. Round your answers o the nerest whole dollar if required 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.Explanation / Answer
a) Depreciation expense per year = (139230-9350/17) = 7640 per year
Book value at the end of 4th year = 139230-(7640*4) = $108670
b) Journal entry :
Date account & explanation debit credit Depreciation expense (7640*3/12) 1910 Accumlated depreciation 1910 (To record depreciation) Cash 101695 Accumlated depreciation (7640*4+1910) 32470 Loss on sale of equipment 5065 Equipment 139230 (To record Sale of equipment)Related Questions
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