Homework Answers
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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