76% Exercise 9-8 Here are selected 2012 transactions of Eghan Corporation. an. 1

Question

76% Exercise 9-8 Here are selected 2012 transactions of Eghan Corporation. an. 1 Retired a piece of machinery that was purchased on January 1, 2002. The machine cost $61,530 and had a June 30 Sold a computer that was purchased on January 1, 2010. The computer cost $36,800 and had a useful life Dec. 31 Sold a delivery truck for $9,210 cash. The truck cost $25,400 when it was purchased on January 1, 2009, and useful life of 10 years with no salvage value of 4 years with no savage value. The computer was sold for $5,990 cash. was depreciated based on a 5-year useful life with a $3,800 salvage value. Journalze all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Eghan Corporation uses straight-line depreciation. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manuallty.) ne 30 (To record depreciation expense for the first6 months of 2012) (To record depreciation expense for the year 2012) 1213

Explanation / Answer

Solution:

Journal Entries:

Working Note:

June 30: Depreciation = (36,800/4) * (1/2) = 4,600

Accumulated Depreciation- Computer = [36,800 * (2/4)] + 4,600 = 23,000

Loss on Disposal = [36,800 - 23,000] - 5,990 = 7,810

Dec 31: Depreciation Expense = [25,400 - 3,800]/ 5 = 4,320

Accumulated Depreciation- Computer = [25,400 - 3,800] * (4/5) = 17,280

Gain on Disposal = 9,210 - [25,400 - 17,280] = 1,090

Date Account Title & Explanation Debit Credit 1-Jan Accumulated Depreciation- Machinery    61,530 Machinery    61,530 30-Jun Depreciation Expense      4,600 Accumulated Depreciation- Computer      4,600 Cash      5,990 Accumulated Depreciation- Computer    23,000 Loss on Disposal      7,810 Computer    36,800 31-Dec Depreciation Expense      4,320 Accumulated Depreciation- Truck      4,320 Cash      9,210 Accumulated Depreciation- Truck    17,280 Gain on Disposal      1,090 Delivery Truck    25,400

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.