Question

Print item Calculator Show Me How Book Disposal of Foced Asset Equipment acquired on January 6 at a cost of $385,000, has an estimated useful Ife of 9 years and an estimated residual value of $50.200. a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation? Depreciation Expense Year Yвar 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 47 Feedba Check My Wo Asset cost minus residual value equals depreciablle gost Asset cost minus accumulated depreciation equals book value. The Accumulated Depreciation account is a permanent account and therefore the balance in the account grows each year of the asset's ife. Leaming Objective 3 c. Assuming that the equipment was sold on January 3 of Year 4 for $259,700, joumalize the entry to record the sale. If an amount box does not ranirs an anhn laetbank heck ty Work Previous Next 954 AM 11/12/2019

Answer 1

Straight line method-Depreciation = ($385,000-$50,200)/9 Straight line method-Depreciation = $334,800/9 Straight line method-Depreciation = $37,200 a) | Year Year 1 Year 2 Year 3 Depreciation expense $ 37,200 $ 37,200 $ 37,200 Accumulated depreciation On January 1 of Year 4 = $37,200 + $37,200 + $37,200 Accumulated depreciation On January 1 of Year 4 = $111,600 Book value as on January 1 of Year 4 = $385,000 - $111,600 Book value as on January 1 of Year 4 = $273,400

Credit Account Titles and Explanation Cash $ Accumulated depreciation-Equipment $ Loss on sale of equipment $ Equipment (To record the sale of equipment) Debit 259,700 111,600 13,700 $ 385,000 Credit Debit 278,900 111,600 Account Titles and Explanation Cash $ Accumulated depreciation Equipment $ Gain on sale of equipment Equipment (To record the sale of equipment) $ $ 5,500 385,000