FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transactions for fixed assets, including saleThe following transactions,
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- The following transactions were completed by SloMo Company during a 3-year period. All transactions are related to the use of fixed assets. The double-declining method of depreciation is used. Year 1: Jan. 3 Oct. 2 Dec. 31 Year 2: Feb. 6 Mar. 31 Nov. 2 Dec. 31 Year 3: Jun. 1 Nov. 2 Dec. 31 Bought a used piece of manufacturing equipment for $30,000. Paid cash for the equipment. Paid a repair company $725 for maintenance and repairs to the equipment. Recorded depreciation on the equipment for the year. The estimated useful life of the equipment is 5 years, with a residual value of $5,000. Bought a new piece of manufacturing equipment for $60,000. Paid cash for the equipment. Sold the used piece of manufacturing equipment for $15,000. (Record depreciation to date in Year 2 for the equipment.) Paid the repair company $250 for repairs to the equipment. Record depreciation for the new manufacturing equipment. It has an estimated residual value of $10,000 and a useful life of 5 years. Bought…arrow_forwardSale of Equipment Equipment was acquired at the beginning of the year at a cost of $537,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $45,805. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $94,863. Round your answer to the nearest cent. Enter your answer as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.arrow_forwardPresented here are selected transactions for Cullumber Limited for 2024. Cullumber uses straight-line depreciation and records adjusting entries annually. Jan. 1 Sold a delivery truck for $19.190 cash. The truck cost $67,530 when it was purchased on January 1, 2021, and was depreciated based on a four-year useful life with a $6,290 residual value. Sept. 1 Dec. 30 Sold computers that were purchased on January 1, 2022. They cost $11,628 and had a useful life of three years with no residual value. The computers were sold for $540 cash. Retired equipment that was purchased on January 1, 2015. The equipment cost $146,400 and had a useful life of 10 years with no residual value. No proceeds were received. Show Transcribed Text Gain on Disposal Vehicles Assume that, when the delivery truck was sold on January 1, the accountant only recorded a debit to Cash and a credit to Gain on Disposal. Because of this, also assume that the accountant recorded depreciation on this asset for 2024. What…arrow_forward
- Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $612,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $49,470. a. What was the depreciation for the first year? Round your answer to the nearest cent. $ b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the end of year eight for $106,489. Round your answer to the nearest cent and enter as a positive amount. $Loss c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent. Cash Accumulated Depreciation-Equipment Loss on Sale of Equipment Equipmentarrow_forwardComputer equipment was acquired at the beginning of the year at a cost of $57,500 that has an estimated residual value of $3,500 and an estimated useful life of 5 years. a. Determine the depreciable cost.fill in the blank 1 of 1$ b. Determine the double-declining-balance rate.fill in the blank 1 of 1 % c. Determine the double-declining-balance depreciation for the first year.fill in the blank 1 of 1$arrow_forwardBlue Co. purchased equipment on October 4, 20X1 at a cost of $63,000. The equipment has an estimated useful life of 4 years and an estimated salvage value of $3,000. Blue Co. uses the straight-line depreciation method. Blue Co.’s fiscal year-end is December 31. Assuming Blue Co. uses the half-year convention, what was the accumulated depreciation as of December 31, 20X2? (Round all results to the nearest whole dollar.) a. $30,000 b. $22,500 c. $15,000 d. $7,500arrow_forward
- Equipment acquired on January 8 at a cost of $150,800, has an estimated useful life of 15 years, has an estimated residual value of $8,900, 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? - Assuming that the equipment was sold on April 1 of the fifth year for 105,335. 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.arrow_forwardKnife Edge Company purchased tool sharpening equipment on July 1, 20Y5, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900. Instructions: a. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the straight-line method. Depreciation Expense 20Y5 $fill in the blank 1 20Y6 $fill in the blank 2 20Y7 $fill in the blank 3 20Y8 $fill in the blank 4 b. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the double-declining-balance method. Round the double-declining-balance depreciation rate to six decimal places and round your final answers to the nearest whole dollar. Depreciation Expense 20Y5 $fill in the blank 5 20Y6 $fill in the blank 6 20Y7 $fill in the blank 7 20Y8 $fill in the blank 8arrow_forwardSale of Equipment Equipment was acquired at the beginning of the year at a cost of $587,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $47,305. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $100,097. Round your answer to the nearest cent. Enter your answer as a positive amount. Feedback c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.arrow_forward
- Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $587,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $41,420. a. What was the depreciation for the first year? Round your answer to the nearest cent. 2$ b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $97,086. Round your answer to the nearest cent. Enter your answer as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.arrow_forwardWillow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.a. Prepare the journal entry necessary for recording the purchase of the new carpet.b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method.arrow_forwardŠale of Equipment Equipment was acquired at the beginning of the year at a cost of $550,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,205. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $95,704. Round your answer to the nearest cent. Enter your answer as a positive amount. $ c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.arrow_forward
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