Problem 9 (Sale of fixed assets, 5 Points) Metal recycling equipment acquired on
ID: 2513117 • Letter: P
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Problem 9 (Sale of fixed assets, 5 Points) Metal recycling equipment acquired on January 1, 1997, at a cost of $87,500, has an annual depreciation of $10,250, and is depreciated by the straight-line method. Instructions a. What was the book value of the equipment at December 31, 2000, the end of the fiscal year? b. Assuming that the equipment was sold on July 1, 2001, for $40,000, journalize the entries to record (1) depreciation at July 1, 2001, and (2) the sale of the equipment. Problem 10 (Disposal of Assets, 12 Points) Equipment acquired on January 3, 1997 at a cost of $51,500, has an annual depreciation of $12,000, and is depreciated by the straight-line method. Instructions a. What was the book value of the equipment on January 1, 2000? b. Assuming that the equipment was sold on January 2, 2000, for $13,000, journalize the entry to record the sale. c. Assuming that the equipment was sold on January 2, 2000, for $17,000 instead of $13,000, journalize the entry to record the sale.Explanation / Answer
As per chegg guidelines we answer one question per post. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount time in years from Jan 01 1997 to December 31 2000 4.00 Depreciation per year 10,250.00 Total depreciation 41,000.00 Cost of Equipment 87,500.00 Book value of equipment at Dec 31 '2000 = 87500 - 41000 46,500.00 b) Depreciation till jul 01'2001 = 10250/2 5,125.00 Depreciation Dr 5,125.00 To Accumulated depreciation 5,125.00 Cash DR 40,000.00 Accumulated deprecation DR = 41000 + 5125 46,125.00 Loss on Sale of equipment DR = 87500 - 40000 - 46125 1,375.00 To Equipment 87,500.00
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