NC purchased a cement mixer for $ 14500. The mixer is expected to have a useful life of five years and a residual value of $ 1000 at the end of that time. Required: Prepare the journal entries to record the disposal of the mixer at the end of second year, assume the straight line depreciation method was used and that: a.It was sold for $ 10000 cash b.It was sold for $ 8000 cash c.It was traded in on a similar mixer ( new) having a list price of $ 16500, a trade in allowance of $ 8000 was given and the balance was paid in cash.
NC purchased a cement mixer for $ 14500. The mixer is expected to have a useful life of five years and a residual value of $ 1000 at the end of that time. Required: Prepare the journal entries to record the disposal of the mixer at the end of second year, assume the straight line depreciation method was used and that: a.It was sold for $ 10000 cash b.It was sold for $ 8000 cash c.It was traded in on a similar mixer ( new) having a list price of $ 16500, a trade in allowance of $ 8000 was given and the balance was paid in cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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NC purchased a cement mixer for $ 14500. The mixer is expected to have a useful life of five
years and a residual value of $ 1000 at the end of that time.
Required: Prepare the journal entries to record the disposal of the mixer at the end of second year,
assume the straight line depreciation method was used and that:
a.It was sold for $ 10000 cash
b.It was sold for $ 8000 cash
c.It was traded in on a similar mixer ( new) having a list price of $ 16500,
a trade in allowance of $ 8000 was given and the balance was paid in cash.
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