Question

Faster Company purchased equipment in 2010 for $104,000 and estimated an $8,000 salvage value at the end of the equipment's 10-year useful . At December 31, 2016, there was $67,200 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $21,000 Prepare the appropriate journal entries to remove the equipment from the books of Faster Company on March 31, 2017. (Credit accountries are automatically when the entered. Do not indent manually. If no entry is required, select "No Entry for the account tries and enter for the amounts) No. Account Titles and Explanation Debit Credit (To record depreciation expens for the first 3 months of 2017) (to record sale of equipment)

Answer 1

No. Account Titles and Explanation Debit Credit 2400 1 Depreciation expenses (Note 1) Accumulated Deprectaion (Being depreciation recorded for the 3 months) Note 1: Date of Acquisition Cost Salvage value ufe 2010 104000 80001 2400 10 Years Depreciation p.a. 2 Note Receivable Accumulated Depreciation (Note 1) Loss on sale of Equipment (Note 1) Equipment (Being sales of equipment recorded 21000 69600 13400 =(104000-8000)/10 9600 104000 Accumulated Dep as at 12/31/2016 67200! Dep. From 01/01/17 till 03/31/17 =9600/12*3 2400 As at 03/31/2017 Ac. Dep =67200+2400 69600 Net Book Value =104000-69600 34400 Sales Value 21000 Net loss =34400-21000 13400 cs Scanned with CamScanner

NO. Account Titles and Explanation Debit ($) Credit ($) 2 Note Receivable Accumulated Depreciation Equipment 11,000 20,000 31,000 Note 2: Amount ($) Original Cost in 2014 25,000 Cap. Exp in 2017 6,000 Acc. Dep on the date of disposal 20,000 Sales Value 11,000 Net Book Value =25000+6000-20000 11,000 Loss on sale =11000-11000 NIL cs nned with CamScanner .

No. Account Titles and Explanation Debit ($) Credit ($) 15000 31500 3 Note Receivable ACC Dep Equipment Profit on Sale on Equipment (Being sales of equipment recorded) 45000 1500 Note 3: Book Value Sales Value Original cost Cost of replacement Amount ($) 13,500 15,000 45,000 57,000 Acc. Dep till date -45000-13500 31,500 Profit on sale =15000-13500 1,500 CS Sdanned wit CamScanner