On January 2, 2023, Favorite Clothing Consignments purchased showroom fixtures for $13,000 cash, expecting the fixtures to remain in service for five years. Favorite has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On September 30, 2024, Favorite sold the fixtures for $6,200 cash. Record both depreciation expense for 2024 and sale of the fixtures on September 30, 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Note that 2023 depreciation was recorded and posted in 2023.) Begin by recording the depreciation expense for January 1, 2024 through September 30, 2024. Date Accounts and Explanation Debit Credit Sep. 30 Depreciation Expense—Fixtures 2,340 Accumulated Depreciation—Fixtures 2,340 To record depreciation on fixtures. Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss)
On January 2, 2023, Favorite Clothing Consignments purchased showroom fixtures for $13,000 cash, expecting the fixtures to remain in service for five years. Favorite has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On September 30, 2024, Favorite sold the fixtures for $6,200 cash. Record both depreciation expense for 2024 and sale of the fixtures on September 30, 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Note that 2023 depreciation was recorded and posted in 2023.) Begin by recording the depreciation expense for January 1, 2024 through September 30, 2024. Date Accounts and Explanation Debit Credit Sep. 30 Depreciation Expense—Fixtures 2,340 Accumulated Depreciation—Fixtures 2,340 To record depreciation on fixtures. Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...
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Concept explainers
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.
Topic Video
Question
On
depreciated the fixtures on a double-declining-balance basis, with zero residual value. On
journal entry table. Note that
January
2,
2023,
Favorite
Clothing Consignments purchased showroom fixtures for
$13,000
cash, expecting the fixtures to remain in service for five years.
Favorite
has September 30,
2024,
Favorite
sold the fixtures for
$6,200
cash. Record both depreciation expense for
2024
and sale of the fixtures on
September 30,
2024.
(Record debits first, then credits. Select the explanation on the last line of the 2023
depreciation was recorded and posted in
2023.)
Begin by recording the depreciation expense for January 1,
2024
through
September 30,
2024.
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Date
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Accounts and Explanation
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Debit
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Credit
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Sep. 30
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Depreciation Expense—Fixtures
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2,340
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2,340
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To record depreciation on fixtures.
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Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures.
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Market value of assets received
|
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Less: Book value of asset disposed of
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Cost
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Less: Accumulated Depreciation
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Gain or (Loss)
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