Question

Please, show work.

Blossom Company owns equipment that cost $84.000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $24,000 and an estimated useful life of 5 years. Prepare Blossom Company's journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) (a) Sold for $49,000 on January 1, 2022. (b) Sold for $49,000 on May 1, 2022. (c) Sold for $23,000 on January 1, 2022. (d) Sold for $23,000 on October 1, 2022. No. Account Titles and Explanation Debit Credit (6) (To record depreciation) (To record sale of equipment) (d) (To record depreciation) (To record sale of equipment)

Thanks!

Answer 1

Annual depreciation on equipment = (Cost - Salvage value) / useful life = ($84,000 - $24,000) / 5 = $12,000

Journal Entries
Event	Date	Particulars	Debit	Credit
a	1-Jan-22	Cash Dr	$49,000.00
		Accumulated depreciation - Equipment Dr	$36,000.00
		To equipment		$84,000.00
		To Gain on sale of equipment		$1,000.00
		(To record sale of equipment)
b	1-May-22	Depreciation Expense (12000 *4/12)	$4,000.00
		Accumulated depreciation - Equipment Dr		$4,000.00
		(To record Depreciation)
	1-May-22	Cash Dr	$49,000.00
		Accumulated depreciation - Equipment Dr	$40,000.00
		To equipment		$84,000.00
		To Gain on sale of equipment		$5,000.00
		(To record sale of equipment)
c	1-Jan-22	Cash Dr	$23,000.00
		Accumulated depreciation - Equipment Dr	$36,000.00
		Loss on sale of equipment Dr	$25,000.00
		To equipment		$84,000.00
		(To record sale of equipment)
d	1-Oct-22	Depreciation Expense (12000 *9/12)	$9,000.00
		Accumulated depreciation - Equipment Dr		$9,000.00
		(To record Depreciation)
	1-Oct-22	Cash Dr	$23,000.00
		Accumulated depreciation - Equipment Dr	$45,000.00
		Loss on sale of equipment Dr	$16,000.00
		To equipment		$84,000.00
		(To record sale of equipment)