Journalize entries for disposal of plant assets . (LO 5), AP Instructions Journa
ID: 2445657 • Letter: J
Question
Journalize entries for disposal of plant assets.
(LO 5), AP
Instructions
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Evan's Corporation uses straight-line depreciation.
P9-3BJournalize entries for disposal of plant assets.
(LO 5), AP
Here are selected transactions for Evan's Corporation for 2014. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $47,000 and had a useful life of 10 years with no salvage value. Mar. 31 Sold a computer that was purchased on January 1, 2011. The computer cost $43,400 and had a useful life of 7 years with no salvage value. The computer was sold for $25,000. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $30,000 and was depreciated based on a 6-year useful life with a $3,000 salvage value.Instructions
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Evan's Corporation uses straight-line depreciation.
Explanation / Answer
Evans Corporation Machinery Computer Truck A Year of Purchase 01 January 2004 01 January 2011 01 January 2011 B Useful life (years) 10 7 6 C Years already completed as on 01 January 2014 10 3 3 D Depreciation amount per years: E Cost of the asset $ 47,000 $ 47,000 $ 30,000 F Salvage value $ - $ - $ 3,000 G Depreciatiable amount $ 47,000 $ 47,000 $ 27,000 H Depreciation per year on straight line basis (G/B) $ 4,700 $ 6,714 $ 4,500 I Accumulated Depreciation as on 01 January 2014 (H x C) $ 47,000 $ 20,143 $ 13,500 J Current Year Depreciation (2014) $ - $ 6,714 $ 4,500 K Net Asset Value after Current Year Depreciation (E-I-J) $ - $ 20,143 $ 12,000 L Amount received as sale/Salvage $ - $ 25,000 $ 3,000 M Profit / (Loss)- (L-M) $ - $ 4,857 $ -9,000 Journal Entries Debit Credit 01 January 2004 No entry required on retirement of machinery as it is fully depreciated 31 March 2014 Depreciation $ 6,714 Computer $ 6,714 (Current Year depreciation on computer) 31 March 2014 Cash Account $ 25,000 Computer $ 20,143 Profit on sale of asset $ 4,857 (Sale of Computer) 31 December 2014 Depreciation $ 4,500 Truck $ 4,500 (Current Year depreciation on Truck) 31 December 2014 Cash Account $ 3,000 Loss on sale of asset $ 9,000 Truck $ 12,000 (Discarding of Truck)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.