Pryce Company owns equipment that cost $69,300 when purchased on January 1, 2014

Question

Pryce Company owns equipment that cost $69,300 when purchased on January 1, 2014. It has been depreciated using the straight-line method based on estimated salvage value of $6,900 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 indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a) Sold for $32,440 on January 1, 2017. (b) Sold for $32,440 on May 1, 2017. (c) Sold for $10,300 on January 1, 2017. (d) Sold for $10,300 on October 1, 2017.

Explanation / Answer

Journal Entries:

s.no. Date Accounts Titles and explanations Debit $ Credit $ a Jan 1, 2017 Accumulated Depreciation 37440 Cash 32440 Income on sale of asset 580 Equipment 69300 (dep for 3 years - 12480*3 = 37440)

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