E-378tLearnangDbectives , 3:Analying the eject of a sale oy P Ddrpecation Assume

Question

E-378tLearnangDbectives , 3:Analying the eject of a sale oy P Ddrpecation Assume that on January 2, 20X6, LaSalle of Lyon purchased fixtures for 8,300 ash, expect g the fixtures to remain in service for Eve years. LaSalle has depreciated the fixtures on adouble declining balance basis, with 1,70D estimated residual value. On September 30 20X7, LaSalle sold the fixtures for 2,300 cash Record both the depreciation expense on the ixtures for 20X7 and then the sale of the fixtures. Apart from your journal entry, also show how to compute the gain or loss on LaSalle's disposal of these Eixtures

Explanation / Answer

Double decline rate = 100/5*2 = 40%

2016 dep = 8300*40% = 3320

Journal entry :

Cost = 8300

Accumlated dep 2007 = (8300*40%+8300*60%*40%*9/12) = 4814

Book value on september 2017 = 8300-4814 = 3486

Loss on sale of fixtures = 3486-2300 = 1186

Date accounts & explanation debit credit Sep 30 2017 Depreciation expense (8300*60%*40%*9/12) 1494 Accumlated depreciation 1494 (To record depreciation) Sep 30 2017 Cash 2300 Accumlated depreciation (8300*40%+2300) 4814 Loss on sale of fixtures 1186 Fixtures 8300 (To record sale of fixtures)

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