On July 1, 2016, Alpha Company purchased for $72,000, equipment having a service

Question

On July 1, 2016, Alpha Company purchased for $72,000, equipment having a service life of eight years and an estimated residual value of $6,000. Alpha has recorded depreciation of the equipment using the double-declining balance method. On December 31, 2018, before making any annual adjusting entries, the equipment was exchanged for new machinery having a fair value of $32,500. The transaction has commercial substance. Use this information to prepare all General Journal entries (without explanation) required to record the events for December 31, 2018.

Explanation / Answer

Journal Entries

Year Carrying Value Depreciation
[Carrying value*1/8*2] Accumulated Depreciation Book Value
[Carrying Value- Dep] 2016 72000 9000 9000 63000 2017 63000 15750 24750 47250 2018 47250 11812.5 36562.5 35437.5

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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