Homework Answers
| We would first calculate the book value of equipment at time of sale | ||||
| Depreciation per year | (Cost - Salvage value)/Estimated useful life | |||
| Depreciation per year | (68000-9000)/8 | |||
| Depreciation per year | $7,375.00 | |||
| Book value | Cost - Accumulated depreciation | |||
| Book value | 68000-(7375*6) | |||
| Book value | 68000-44250 | |||
| Book value | $23,750 | |||
| Journal entry to record equipment sale for $30,000 cash | ||||
| General Journal | Debit | Credit | ||
| Cash | $30,000 | |||
| Accumulated depreciation | $44,250 | |||
| Equipment | $68,000 | |||
| Gain on sale of equipment | $6,250 | (30000-23750) | ||
| (To record sale of equipment) | ||||
| Journal entry to record equipment sale for $23,750 cash | ||||
| General Journal | Debit | Credit | ||
| Cash | $23,750 | |||
| Accumulated depreciation | $44,250 | |||
| Equipment | $68,000 | |||
| (To record sale of equipment) | ||||
| Journal entry to record equipment sale for $21,000 cash | ||||
| General Journal | Debit | Credit | ||
| Cash | $21,000 | |||
| Accumulated depreciation | $44,250 | |||
| Loss on sale of equipment | $2,750 | (23750-21000) | ||
| Equipment | $68,000 | |||
| (To record sale of equipment) | ||||
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E9-7B. Sale of Plant Asset Shannon Company has equipment that originally cost $68,000. Depreciation has been...
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Sale of Plant Asset Shannon Company has a equipment that originally cost $68,000. Depreciation has been recorded for six years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected eight-year life. After recording depreciation at the end of six years, Shannon sells the equipment. Prepare the journal entry to record the equipment's sale for (Round to the nearest dollar): a. $30,000 cash b. $23,750 cash c. $21,000 cash General Journal Description Date Debit...
Sale of Plant Asset Shannon Company has a equipment that originally cost $68,000. Depreciation has been...
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