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х Instructions Equipment acquired on January 8 at a cost of $142,430 has an estimated useful life of 16 years, has an estimata. What was the book value of the equipment at December 31 the end of the fifth year? $100,280 Points: 1/1 Feedback Check Myb.Assuming that the equipment was sold on April 1 of the sixth year for $93,142, journalize the entries to record the followi5/5 Points: 2. The sale of the equipment. Round your final answers to the nearest whole dollar. How does grading work? PAGE 2

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Answer #1
WORKING NOTES: 1
CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD
Purchase Cost of Equipment $               1,42,430
Less: Salvage Value $                     7,550
Net Value for Depreciation $               1,34,880
Usefule life of the Assets 16 years
Depreciation per year = Value for Depreciation / 16 years = $                     8,430
Total Depreciation Per year = $                     8,430
WORKING NOTES: 2
CALCULATION OF BOOK VALUE AS ON 01ST APRIL OF 6TH YEAR AND GAIN OR LOSS ON SALE
Purchase price of Equipment $               1,42,430
Less: Depreciation for 5 years $                  42,150
Less: Depreciation for 3 months ($ 8,430 *3 /12 month) $                     2,108
Book Value $                  98,172
Less : Sales Price $                  93,142
Loss on Sold $                     5,030
SOLUTION : A CALCULATION OF BOOK VALUE OF EQUIPMENT AT THE END OF 5TH YEAR
Purchase cost of Equipment $               1,42,430
Less: Depreciation for 5 years = $ 8,430 X 5 years = $                  42,150
Book Value = $               1,00,280
SOLUTION : B
Journal Entries
Date Account Title and explanation Debit Credit
Record the depreciation as on April, 01
Apr, 01 Depreciation $               2,108.00
        Accumulated Depreciation $                       2,108
Record the sale transaction as on April, 01
Apr, 01 Cash $                  93,142
Accumulated Deprecaition - Equipment $                  44,258
Loss on sale of Equipment $                     5,030
        Equipment $                 1,42,430
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