How would I even go about solving this problem? I am so confused because I just

Question

How would I even go about solving this problem? I am so confused because I just figured our depreciation from 68000-9000/8 years, is this correct or how would I do this.

Sale of Plant Asset Noble Company has a equipment that originally cost $68,000. Depreciation has been recorded for six years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected eight-year life. After recording depreciation at the end of six years, Noble sells the equipmentPrepare the journal entry to record the equipments sale for (Round to the nearest dollar): a $27,000 cash b. $23,750 cash C. $18,000 cash General Journal Date Description Debit Credit a Cash 27,000 o Accumulated depreciation - Equipment a 7,375 Equipment Loss on sale of Plant Assets a 0 0 To record sale of equipment.

Explanation / Answer

CALCULATE ACCUMLATED DEP :

Straight line dep = (68000-9000)/8 = 7375 per year

Accumlated dep = 7375*6 = 44250

JOURNAL ENTRY :

date accounts & explanation debit credit a) Cash a/c 27000 Accumlated depreciation a/c 44250       Gain on sale of equipment 3250       Equipment a/c 68000 (TO record sale of equipment) b) Cash 23750 Accumlated depreciation 44250       Equipment a/c 68000 (To record sale of equipment) c) Cash a/c 18000 Accumlated depreciation 44250 Loss on sale of equipment 5750        Equipment a/c 68000 (To record sale of equipment)

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