Question

			Entries for Sale of Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.Fixed Asset Equipment acquired on January 8 at a cost of $156,950, has an estimated useful life of 15 years, has an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $9,050, and is depreciated by the A method of depreciation that provides for equal periodic depreciation expense over the estimated life of a fixed asset.straight-line method. a. What was the The cost of a fixed asset minus accumulated depreciation on the asset.book value of the equipment at December 31 the end of the fourth year? $ Feedback b. Assuming that the equipment was sold on April 1 of the fifth year for 109,680. 1. Journalize the entry to record The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. Accounts Payable Accumulated Depreciation-Equipment Cash Depreciation Expense-Equipment Equipment Equipment Expense Accounts Payable Accumulated Depreciation-Equipment Cash Depreciation Expense-Equipment Equipment Equipment Expense Feedback 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Accounts Payable Cash Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Accounts Payable Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Gain on Sale of Equipment Accounts Receivable Depreciation Expense-Equipment Equipment Loss on Sale of Equipment Depreciation Payable-Equipment Accumulated Depreciation-Equipment Equipment Equipment Expense Gain on Sale of Equipment Loss on Sale of Equipment

Answer 1

	Depreciation expense
	(156950 - 9,050)/15
	9860
a)	Book value at the end of foruth year
	original cost				156950
	Accumulated depreciation (9860*4)				39440
	Book value at the end of fourth year				117510
b)	Account titles & Explanations					Debit	Credit
1)	Depreciation expense					2465
	Accumulated Depreciation -Equipment						2,465
	(9860/12)*3
2)	cash					109,680
	Accumulated Depreciation					41905
	loss on sale of Equipment					5,365
	Equipment						156950