ent CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK Pryce Comp

Question

ent CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2016. It has been depreciated using the straight-line method based on an estimates salvage value of $5,000 and an estimated useful life of 5 years Prepare Pryce Company's journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indent when amount is entered. Do not indent manually. Round answers to O decimal places, e.g.125. If no entry is required, select "No Entry" for the accou titles and enter O for the amounts.) (a) Sold for $31,000 on January 1, 2019 (b) Sold for $31,000 on May 1, 2019. (c) Sold for $11,000 on January 1, 2019. (d) Sold for $11,000 on October 1, 2019 No. Account Titles and Explanation Debit Credit (a) Cash 31,000 Accumulated Depreciation-Equipment 36 65,000 Equipment 2,000 Gain on Disposal of Plant Assets 31,000 (b) TCash 40,000 Accumulated Depreciat (To record depreciation) 65,000 Versio iley & Sons. Inc. All Rights Reserved. A Division of John Wiley & Sons Inc

Explanation / Answer

As we charge depreciation on pro rata basis the depreciation is to be charged till the the date the assets is sold for therfore entry A will be

Cash A/c Dr. 31000

Accumulated depreciation on equipment A/c Dr 36000

Equipment A/c 65000

gain on disposla of Assets A/c 2000

The entry B will be as Follows

1 Entry Will be

Depreciation Expenses A/c dr 4000

To Accumulated Depreciation A/c 4000

( to record Depreciation)

2 Entry Will be as follows

cash A/c Dr 31000

Accumulated Depreciation A/c Dr. 40000

To Equipment A/c 65000

To Gain On sale of Assest A/c 6000

(to record to sale of equipment)

3. Entry will be

Cash A/c Dr 11000

Accmulated Depreciation A/c Dr. 36000

Loss On sale of Equipment A/c Dr 18000

To Equipment A/c 65000

(to record sale of assets)

4. Entry Will be as follows

1 Entry Will be as follows

Depreciation Expenses A/c Dr. 9000

To Accumulated Depreciation A/c 9000

(to record Depreciation )

2 the entry will be as follows

Cash A/c Dr. 11000

Accumulated Depreciation A/c Dr. 45000

Loss on sales of Assets A/c Dr. 9000

To Equipment A/c 65000

(to Record Sale of Assest)

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