Question

Ivanhoe Company owns equipment that cost $63,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $3,000 and an estimated useful life of 5 years. Prepare Ivanhoe Company's journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) (a) Sold for $29,000 on January 1, 2022. (b) Sold for $29,000 on May 1, 2022 (c) Sold for $9,000 on January 1, 2022. (d) Sold for $9,000 on October 1, 2022

Answer 1

solution S.NO General Journal Debit Gedet cash 29000 36000 63000 Acumulated depreciation (1000 x 36 monthe) Equipment Garn on Disposal 2000 29000 40000 cash Accumulated depreclation ( 1000 X 40 months) Equelpment Galn on Disposal 63000 6000 9000 36000 cash Accumulated depreciation (1000 x 36 months) Loss on disposal Equipment 18000 63000 4000 45000 cash Accumulated depreclation (1000 x 45 months) Loss on Disposal Equepment 4000 63000 WoNotes & Depreelation per month = [cost-salvage value] / No. of monther = [ 63000 – 3000] 160 - 1000