yPLUS Weygandt, ccounting Prindples, 12e PRINCIPLES Of ACCOUNTING l & II (ACC 20
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yPLUS Weygandt, ccounting Prindples, 12e PRINCIPLES Of ACCOUNTING l & II (ACC 201 , 202) Exercise 10-10 Pryce Company owns equipment that cost $66,600 when purchased on January 1, 2014. It has been depreciated using the straight-line method based on estimated salvage value of $3,300 and an estimated useful life of 5 years Prepare Pryce Company's journal entries to record the sale of the equipment in these four se 10-9 Pert account titles are automatically indented when amount is entered. Do not indent manually. Round answers to o independent situations. (Credit decimal places, e.g.125. If no entry is required, select "No Entry" for the account titfes and enter 0 for the (a) Sold for $32,980 on January 1, 2017 (b) Sold for $32,980 on May 1, 2017 (c) Sold for $10,000 on January 1, 2017 (d) Sold for $10,000 on October 1, 2017 No. Account Tiles and Explanation ts by Study t th or th te e The cho (To record depreciation) elect inter (lo record sale of equipment) ng th ob tr and and g ying tion? grap ratir nizat (To secord sale of eqvipment 0 Type here to searchExplanation / Answer
Calculation of Depreciation as per straight line Depreciation Cost of Purchase of Equipment $ 66,600 Less : Salvage Value $ 3,300 Value for Depreciation $ 63,300 Life of the Building is = 5 Years Depreciation for the year = ($63,300 / 5 Years) $ 12,660 Note: A) Sold for $ 32,980 on January 1, 2017 Purchase Value of the Equipment = $ 66,600.00 Less: Depreciation for 3 Years @ 12,660 X 3 = $ 37,980.00 Book Value = 28,620.00 Less: Sales Value $ 32,980.00 Gain on sale $ 4,360.00 Note: B) Sold for $ 32,980 on May 1, 2017 Purchase Value of the Equipment = $ 66,600.00 Less: Depreciation for 3 Years @ 12,660 X 3 = $ 37,980.00 Less: Depreciation for 4 months @ 12,660 X 4/12 = $ 4,220.00 Book Value = 24,400.00 Less: Sales Value $ 32,980.00 Gain on sale $ 8,580.00 Note: C) Sold for $ 10,000 on Jan 1, 2017 Purchase Value of the Equipment = $ 66,600.00 Less: Depreciation for 3 Years @ 12,660 X 3 = $ 37,980.00 Book Value = 28,620.00 Less: Sales Value $ 10,000.00 Loss on sale $ 18,620.00 Note: D) Sold for $ 10,000 on Oct 1, 2017 Purchase Value of the Equipment = $ 66,600.00 Less: Depreciation for 3 Years @ 12,660 X 3 = $ 37,980.00 Less: Depreciation for 9 months @ 12,660 X 9/12 = $ 9,495.00 Book Value = 19,125.00 Less: Sales Value $ 10,000.00 Loss on sale $ 9,125.00 Journal Entries Date Account Title and explanation Debit Credit Cash $ 32,980 A) Accumulated Depreciation $ 37,980 To Equipment $ 66,600 To Gain on sale of Equipment $ 4,360 (To Record the sale of Equipment) B) Cash $ 32,980 Accumulated Depreciation $ 42,200 To Equipment $ 66,600 To Gain on sale of Equipment $ 8,580 (To Record the sale of Equipment) C) Cash $ 10,000 Accumulated Depreciation $ 37,980 Loss on sale of Equipment $ 18,620 To Equipment $ 66,600 (To Record the sale of Equipment) D) Cash $ 10,000 Accumulated Depreciation $ 47,475 Loss on sale of Equipment $ 9,125 To Equipment $ 66,600 (To Record the sale of Equipment)
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