Question

exercise 2e Lynn Company ouns equipnont thot cost 120,000 whin purchosed on Jonuany ,2018. It has been deprectated using the Sroignt lune method based on estinated solvage value of IS, 000 and on eshnated useful Ife of syears Prepare Lynn Componys Journal entnes to ecord ths saie O6 the eguipment a) Sold Por S8, 000 on Januany 1,2021 Jour in dpendent shuanons in These b) Sold r 15E,000 on may 1.2021 Januany ,2021 on C) Sdd Por 32,000 Jold r 32,000 on October ,202 978-1-1/9-SYS 77-4

Answer 1

Ans:

Statementshowing Computations
Paticulars	Amount
Cost of Equipment	120,000.00
Salvage Value	15,000.00
Life in years	5.00
Depreciation per year = (120,000-15,000)/5	21,000.00
a)	Debit	Credit
Cash Dr	58,000.00
Accumulated depreciation Dr ( 21000*3)	63,000.00
Profit on sale of equipment (bal fig)		1,000.00
Equipment		120,000.00
(TO record the sale of Equipment)
b)
Cash Dr	58,000.00
Accumulated depreciation Dr = 21000*3 + 21000/12*4	70,000.00
Profit on sale of equipment (bal fig)		8,000.00
Equipment		120,000.00
(TO record the sale of Equipment)
c)
Cash Dr	32,000.00
Accumulated depreciation Dr = 21000*3	63,000.00
Loss on sale of equipment Dr (bal fig)	25,000.00
Equipment		120,000.00
(TO record the sale of Equipment)
d)
Cash Dr	32,000.00
Accumulated depreciation Dr = 21000*3 + 21000/12*9	78,750.00
Loss on sale of equipment Dr (bal fig)	9,250.00
Equipment		120,000.00
(TO record the sale of Equipment)