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Part 3: Sale of an Asset Saltino Corporation purchased a new machine for $80,000 on April 1, 2019. At that time Saltino expec

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Answer #1

a.

Annual depreciation = ( Cost price - Salvage value) / Useful life

= ( 80,000-8,000)/9

= 72,000/9

= $8,000

Accumulated depreciation balance on December 31, 2023 = 8,000 x 4.75

= $38,000

b.

Depreciation expense for 2024 = Annual depreciation x 9/12

=8,000 x 9/12

= $6,000

c.

Accumulated depreciation till the date of sale = Accumulated depreciation balance on December 31, 2023 + Depreciation expense for 2024

= 38,000+6,000

= $44,000

Book value of equipment on the date of sale = Cost price - Accumulated depreciattion

= 80,000-44,000

= $36,000

Sale price of equipment = $44,000

Gain on sale of equipment = Sale price of equipment - Book value of equipment on the date

= 44,000-36,000

= $8,000

Journal

Date General Journal Debit Credit
September 30, 2024 Cash $44,000
Accumulated depreciation - Equipment 44,000
Equipment $80,000
Gain on sale $8,000

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