ANSWER TO PE 10-6A
a).Depreciation of the asset for 1st year:
Depreciation=( cost - salvage value)÷ no. Of years usage
= $( 465000-45000)÷15
=$ 28000
b) asset sold at the end of year 8:-
Value of asset at the end of eighth year = 465000 - (28000×8)
= 241000
(-) sale value of asset. = 235000
__________
LOSS on the sale of asset. = 6000_____
C). Journal entry on the sale of asset:-
Bank a/c. Dr. 235000
LOSS on sale of asset a/c. Dr. 6000
To asset a/c. 241000
( Being asset sold)
Profit and loss a/c. Dr. 6000
To loss on sale of asset a/c. 6000
( Being loss on asset transferred)
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