Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2016
ID: 2570132 • Letter: P
Question
Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2016. It has been depreciated using the straight-line method based on an estimated salvage value of $5,000 and an estimated useful life of 5 years.
Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No.
Account Titles and Explanation
Debit
Credit
(To record depreciation)
(To record sale of equipment)
(To record depreciation)
(To record sale of equipment)
please check the pictures because it contains the table's arrangment.
URCES (a) (b) (c) (d) Sold for $31,000 on January 1, 2019 Sold for $31,000 on May 1, 2019. Sold for $11,000 on January 1, 2019. Sold for $11,000 on October 1, 2019 12 No. Account Titles and Explanation Debit Credit (a) Cash 31000 Accumulated Depreciation-Equipment 31000 Study Gain on Disposal of Plant Assets 2000 Equipment 65000 (b) Cash 31000 Accumulated Depreciation-Equipment 40000 (To record depreciation) Gain on Disposal of Plant Assets 6000 65000 Equipment (To record sale of equipment)Explanation / Answer
Depreciation = $65000 - $5000 / 5 years
= $12000
a. Sold or $31000 Jan1 2019
Cash $31000
Accummulated depreciation $36000
To Gain on sale $2000
To Equipment $65000
b. Sold for $31000 on may 1 2019
Cash $31000
Accummulated depreciation $40000
To Gain on sale $6000
To Equipment $65000
c. sold for $11000 on Jan 1 2019
Cash $11000
Accummulated depreciation $36000
Loss on sale $18000
To Equipment $65000
d. Sold for $11000 on Oct 1 2019
Cash $11000
Accummulated depreciation $45000
Loss on sale $10000
To Equipment $65000.
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