An asset acquired January 1, 2018, for $14,100 with an estimated 10-year life and no residual...
An asset acquired January 1, 2018, for $14,100 with an estimated 10-year life and no residual value is being depreciated in an equipment group asset account that has an average service life of eight years. The asset is sold on December 31, 2019, for $6,900. The entry to record the sale would be:
Multiple Choice
-
Cash 6,900 Accumulated depreciation 3,525 Loss on sale of equipment 3,675 Equipment 14,100 -
Cash 6,900 Loss on sale of equipment 7,200 Equipment 14,100 -
Cash 6,900 Equipment 6,900 -
Cash 6,900 Accumulated depreciation 7,200 Equipment 14,100
Homework Answers
Cost of assets = $14,100
Date of purchase = January 1, 2018
Useful life = 8 years
Date of sale = December 31, 2019
Sale price = $6,900
Equipment has been used for 2 years
Annual depreciation = Cost of equipment / Useful life
= 14,100/8
= $1,762.50
Accumulated depreciation for 2 years = Annual depreciation x 2
= 1,762.5 x 2
= $3,525
Book value equipment on the date of sale = Cost of assets - Accumulated depreciation for 2 years
= 14,100-3,525
= $10,575
Loss on sale of equipment = Book value equipment on the date of sale - Sale price
= 10,575-6,900
= $3,675
The entry to record sale would be:
-
Cash 6,900 Accumulated depreciation 3,525 Loss on sale of equipment 3,675 Equipment 14,100
1st option is correct option.
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An asset acquired January 1, 2018, for $14,100 with an estimated
10-year life and no residual...
An asset acquired January 1, 2018, for $14,100 with an estimated 10-year life and no residual...
An asset acquired January 1, 2018, for $14,100 with an estimated 10-year life and no residual value is being depreciated in an equipment group asset account that has an average service life of eight years. The asset is sold on December 31, 2019, for $6,900. The entry to record the sale would be: Multiple Choice Cash 6,900 Loss on sale of equipment 7,200 Equipment 14,100 Cash 6,900 Equipment 6,900 Cash 6,900 Accumulated depreciation 7,200 Equipment 14,100
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