M our Chegg.com Reset P Equipment Was Acqure × / × CengageNow2 I online x w.com/
ID: 2564952 • Letter: M
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M our Chegg.com Reset P Equipment Was Acqure × / × CengageNow2 I online x w.com/ilm/takeAssignment/takeAssignment Main.do?invoker-assignments&takeAssignmentSessionLocator; assignment-takei assignment-take&inprogress-false; Calculator Analysis General Journal Instructions Equipment was acquired at the beginning of the year at a cost of $77,220. The equipment was depreciated using the straight-line method based on an estimated useful life of six years and an estimated residual value of $7,560. Required: (a) What was the depreciation expense for the first year? (b) Assuming the equipment was sold at the end of the second year for $58,320, determine the gain or loss on sale of the equipment. (c) Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.Explanation / Answer
1. Depreciation expenses for first year = (77220-7560)/6 = 11610
2) Compute gain or loss on equipment :
Book value on end of second year = 77220-(11610*2) = 54000
Gain or loss on equipment = Sale value- Book value at the end of second year
= 58320-54000
Gain on sale of equipment = 4320
3) Journal entry :
date accounts & explanation debit credit Cash a/c 58320 Accumlated dep (11610*2) 23220 Equipment a/c 77220 Gain on sale of equipment 4320 (To record sale of equipment)Related Questions
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