Entries for Sale of Fixed Asset Equipment acquired on January 5 at a cost of $107,600, has an estimated useful life of 12 years, has an estimated residual value of $9,200, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for 67,585. 1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.
Entries for Sale of Fixed Asset Equipment acquired on January 5 at a cost of $107,600, has an estimated useful life of 12 years, has an estimated residual value of $9,200, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? b. Assuming that the equipment was sold on April 1 of the fifth year for 67,585. 1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.
Chapter4: The Adjustment Process
Section: Chapter Questions
Problem 7PA: Using the following information: A. make the December 31 adjusting journal entry for depreciation B....
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Entries for Sale of Fixed Asset
Equipment acquired on January 5 at a cost of $107,600, has an estimated useful life of 12 years, has an estimated residual value of $9,200, and is depreciated by the
straight-line method.
a. What was the book value of the equipment at December 31 the end of the fourth year?
$
b. Assuming that the equipment was sold on April 1 of the fifth year for 67,585.
1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required.
2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.
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