FULL SCREEN NEXT PRINTER VERSION ·BACK ESOURCES mework Exercise 9-10 Pryce Compa
ID: 2596073 • Letter: F
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FULL SCREEN NEXT PRINTER VERSION ·BACK ESOURCES mework Exercise 9-10 Pryce Company owns equipment that cost $66,800 when purchased on January 1, 2014. It has been depreciated using the straight-line method based on an estimated salvage value of $4,000 and an estimated useful life of S years. Prepare Pryce Company's journal entries to record the sale of the 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 equipment in these four independent situations. (Credit amounts.) 9-1 (a) Sold for $32,680 on January 1, 2017. (b) Sold for $32,680 on May 1, 2017 (c) (d) Sold for $10,200 on January 1, 2017. Sold for $10,200 on October 1, 2017. esults by Study No. Account Titles and Explanation (a) C (b) CExplanation / Answer
Answer a Depreciation per year using straight line method = (Cost - salvage value)/useful life = ($66800 - $4000)/5 years = $12560 Calculation of accumulated depreciation Journal entry to record sale of equipment Year Depreciation Date Account Titles and Explanation Debit Credit 2014 $12,560 Jan.1,2017 Cash $32,680 2015 $12,560 Accumulated Depreciation $37,680 2016 $12,560 Equipment $66,800 Accumulated depreciation as on Jan.1,2017 $37,680 Gain on sale of equipment $3,560 Answer b Calculation of accumulated depreciation Journal entry to record sale of equipment Year Depreciation Date Account Titles and Explanation Debit Credit 2014 $12,560 May 1,2017 Cash $32,680 2015 $12,560 Accumulated Depreciation $41,867 2016 $12,560 Equipment $66,800 2017 = [($12560/12 months)*4 months] $4,187 Gain on sale of equipment $7,747 Accumulated depreciation as on May.1,2017 $41,867 Answer c Calculation of accumulated depreciation Journal entry to record sale of equipment Year Depreciation Date Account Titles and Explanation Debit Credit 2014 $12,560 Jan.1,2017 Cash $10,200 2015 $12,560 Accumulated Depreciation $37,680 2016 $12,560 Loss on sale of equipment $18,920 Accumulated depreciation as on Jan.1,2017 $37,680 Equipment $66,800 Answer d Calculation of accumulated depreciation Journal entry to record sale of equipment Year Depreciation Date Account Titles and Explanation Debit Credit 2014 $12,560 Oct.1,2017 Cash $10,200 2015 $12,560 Accumulated Depreciation $47,100 2016 $12,560 Loss on sale of equipment $9,500 2017 = [($12560/12 months)*9 months] $9,420 Equipment $66,800 Accumulated depreciation as on Oct.1,2017 $47,100
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