Equipment was acquired at the beginning of the year at a cost of $33,250. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of ten years and an estimated residual value of $650. a. What was the depreciation for the first year? $fill in the blank 004e15f39fc2053_1 b. Assuming the equipment was sold at the end of year 2 for $8,190, determine the gain or loss on the sale of the equipment. $fill in the blank 004e15f39fc2053_2 Loss c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash fill in the blank a12c97fcff9f007_2 fill in the blank a12c97fcff9f007_3 Accumulated Depreciation-Equipment fill in the blank a12c97fcff9f007_5 fill in the blank a12c97fcff9f007_6 Loss on Sale of Equipment fill in the blank a12c97fcff9f007_8 fill in the blank a12c97fcff9f007_9 Equipment fill in the blank a12c97fcff9f007_11 fill in the blank a12c97fcff9f007_12
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.
Sale of Equipment
Equipment was acquired at the beginning of the year at a cost of $33,250. The equipment was
a. What was the depreciation for the first year?
$fill in the blank 004e15f39fc2053_1
b. Assuming the equipment was sold at the end of year 2 for $8,190, determine the gain or loss on the sale of the equipment.
$fill in the blank 004e15f39fc2053_2 Loss
c.
| Cash | fill in the blank a12c97fcff9f007_2 | fill in the blank a12c97fcff9f007_3 | |
| fill in the blank a12c97fcff9f007_5 | fill in the blank a12c97fcff9f007_6 | ||
| Loss on Sale of Equipment | fill in the blank a12c97fcff9f007_8 | fill in the blank a12c97fcff9f007_9 | |
| Equipment | fill in the blank a12c97fcff9f007_11 | fill in the blank a12c97fcff9f007_12 |
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