Ivanhoe Company sells office equipment on July 31, 2017, for $22,330 cash. The o
ID: 2436342 • Letter: I
Question
Ivanhoe Company sells office equipment on July 31, 2017, for $22,330 cash. The office equipment originally cost $83,350 and as of January 1, 2017, had accumulated depreciation of $38,110. Depreciation for the first 7 months of 2017 is $4,730 Prepare the journal entries to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Debit Question Attempts: 0 of 1 used SAVE FOR LATERSUHET ANSWERExplanation / Answer
Answers
A
Original Cost
$ 83,350.00
B
Accumulated Depreciation till 31 Dec 2016
$ 38,110.00
C
2017 Depreciation expense till date of Sale
$ 4,730.00
D=A - B - C
Book Value at the time of sale
$ 40,510.00
E
Sold for
$ 22,330.00
F = E - D
Gain (Loss) on Sale of Equipment
$ (18,180.00)
No.
Accounts title
Debit
Credit
(a) 31 Jul, 2017
Depreciation expense (Equipment)
$ 4,730.00
Accumulated Depreciation (Equipment)
$ 4,730.00
(depreciation till the time of sale updated)
(b) 31 Jul, 2017
Cash
$ 22,330.00
Accumulated Depreciation (Equipment) – [38110 + 4730]
$ 42,840.00
Loss on Sale
$ 18,180.00
Equipment
$ 83,350.00
(Equipment sold for cash on Loss)
A
Original Cost
$ 83,350.00
B
Accumulated Depreciation till 31 Dec 2016
$ 38,110.00
C
2017 Depreciation expense till date of Sale
$ 4,730.00
D=A - B - C
Book Value at the time of sale
$ 40,510.00
E
Sold for
$ 22,330.00
F = E - D
Gain (Loss) on Sale of Equipment
$ (18,180.00)
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