Exercise 10-10 Pryce Company owns equipment that cost $61,100 when purchased on

Question

Exercise 10-10 Pryce Company owns equipment that cost $61,100 when purchased on January 1, 2014. It has been depreciated using the straight-line method based on estimated salvage value of $4,300 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 O for the amounts. (a) (b) Sold for $29,080 on January 1, 2017. Sold for $29,080 on May 1, 2017 (c) Sold for $10,200 on January 1, 2017 (d) Sold for $10,200 on October 1, 2017.

Explanation / Answer

(a) 01-Jan-17 Cash $ 29,080 Accumulated depreciation (($61,100 - $4,300)/5*3) $ 34,080 Equipment $ 61,100 Gain on sale of equipment $    2,060 (To record sale of equipment) (b) 01-May-17 Depreciation expense (($61,100 - $4,300)/5*4/12) $    3,787 Accumulated depreciation $    3,787 (To record depreciation) 01-May-17 Cash $ 29,080 Accumulated depreciation (($61,100 - $4,300)/5*3)+$3,787) $ 37,867 Equipment $ 61,100 Gain on sale of equipment $    5,847 (To record sale of equipment) c) 01-Jan-17 Cash $ 10,200 Accumulated depreciation (($61,100 - $4,300)/5*3) $ 34,080 Loss on sale of equipment $ 16,820 Equipment $ 61,100 (To record sale of equipment) d) 01-Oct-17 Depreciation expense (($61,100 - $4,300)/5*9/12) $    8,520 Accumulated depreciation $    8,520 (To record depreciation) 01-Oct-17 Cash $ 10,200 Accumulated depreciation (($61,100 - $4,300)/5*3)+$8,520) $ 50,900 Equipment $ 61,100 (To record sale of equipment)

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