Question

On January 2, 2016​, Pet Haven purchased fixtures for $28,600 cash, expecting the fixtures to remain in service for six years. Pet Haven has depreciated the fixtures on a​ straight-line basis, with $7,000

residual value. On May 31​, 2018​, Pet Haven sold the fixtures for $17,400 cash. Record both depreciation expense for 2018 and sale of the fixtures on May 31​, 2018.

​(Assume the modified​ half-month convention is used. Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

1. Begin by recording the depreciation expense as of May 31​, 2018.

2. Complete the table below to determine the gain or loss on the disposal of the fixtures

Answer 1

Solution:- Depreciation Expense per year = ($ 28,600 – $7000) . =($3,600 on May 31, 2018 ; Depreciation for five months = $3600x 5112 -14 1509 Computation of goinlloss en sale of fixturel! particulares Amount [8) Amount it) Amount Received less: Boole value of fistures $ 27,400 $28,600 deprecation cost leys! Acecumulated l 2016 - 3600 2017 - 3600 May 2018 - 1500 (8700) $19,900) 8700 | dolt :- $ 2,500.

Credito Receiding of mournal entries Date Aconde and Eyplanation de bit (8) May 31 Depreciation Expence alc D8 $1500 To accumulation depueciation on Fixtures" (being record of depreciation on Fixtures) $1500 $17400 $8,700 $2,500, May 31 Cash alcio Accumulated dep on Fixtures acc Dr loss on disposal To Fixtures ... (being sold fixtures on cash) $28,600