Solution 1a:
Straight line method | |||
Year | Depreciation Expense for the year (1/5 of depreciable cost) | Accumulated Depreciation | Ending Book Value |
1 | $131,390.00 | $131,390.00 | $587,360.00 |
2 | $131,390.00 | $262,780.00 | $455,970.00 |
3 | $131,390.00 | $394,170.00 | $324,580.00 |
4 | $131,390.00 | $525,560.00 | $193,190.00 |
5 | $131,390.00 | $656,950.00 | $61,800.00 |
Solution 1b:
Depreciation Schedule - Double Declining Balance Method | |||
Date | Depreciation Expense for the year (20%*2 = 40%) | Accumulated Depreciation | Ending Book Value |
1 | $287,500.00 | $287,500 | $431,250 |
2 | $172,500.00 | $460,000 | $258,750 |
3 | $103,500.00 | $563,500 | $155,250 |
4 | $62,100.00 | $625,600 | $93,150 |
5 | $31,350.00 | $656,950 | $61,800 |
Solution 2:
Journal Entries | |||
Event | Particulars | Debit | Credit |
1 | Cash Dr | $105,300.00 | |
Accumulated depreciation - Equipment Dr | $625,600.00 | ||
To Equipment | $718,750.00 | ||
To Gain on sale of equipment | $12,150.00 | ||
(To record sale of equipment) |
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