Question

Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $212.000 has an estimated useful life of 15 vears, has an estimated residual value of $14,000 and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fifth year? 146,000 Febaok Book value is the initial cost of the fixed asset minus the accumulated depreciation. b. Assume that the eguipment was sold on April 1 of the sixth year for $105,800. 1. Joumalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entrv, leave it blank Deprediation Expense Equipment 3.300 Accumudated Depreciation Equipment 3.300 The depreciation account of the fixed asset being sold or discarded needs to be updated to reflect the mionths of use in the vear it is

can you help with what is in red in the 2nd picture please

Answer 1

$146,000 $3300 • Book value at the end of 5th year = Less. Accumulated depreciation upto date of sale [Jan-mar] Actual book value on date of sale - Sale value loss on sale of equipment $ 142,700 $ 105,800 LOSS 3 • Accumulated depreciation upoto 5th year = $ 66,000 [ $212,000 - $116,000] Add: Accumulated depreciation up to date of sale = $ 3300 - [Jan - mar] " Total acumulated deprecation $ 69,300 of equipment cash Accumulated depreciation equipment Loss on sale of equipment Equipment $ 105,200 $ 69,300 $ 36,900 $ 212,000