Question

Question 7 9.6/24 View Policies Show Attempt History Current Attempt in Progress On January 1, 2016, Sheridan Corporation acquired equipment costing $72,320. It was estimated at that time that the equipment would have a useful life of eight years and no residual value. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31. (a) Your answer is correct. Calculate the equipment's accumulated depreciation and carrying amount at the beginning of 2018. Equipment's accumulated depreciation 18080 $ 54240 Carrying amount $ Attempts: 1 of 3 used

Answer 1

Part-c: Correct answer will be: 1355

Working Note

Depreciation Expense for 2 Month for Old Equipment	$1,130.00
(5650/10*2)
Depreciation Expense for 2 Month for New Equipment	$225.00
(10800/8 year )/12 Month X 2 Month
Total Depreciation for 2 Month	$1,355.00

Part-D: Correct answer will be $2950

	Equpment	Accumulated Depreacition
Beg Balance on Jan 2018	$72,320	$18,080
Equipment Sold and reversal of Equivallent Accumulated Depreciation (72320/4) (18080/4)	$18,080	$4,520
Balance after sale on 01/01/2018	$54,240	$13,560
Depreciation Expense from 01 Jan 2018 to 31 October 2018		$5,650
Additional Equipment Purchase on 1 Nov 2018	$10,800
Depreciation Expense from 1st Nov 2018 to 31 Dec 2018		$1,355
Total value on 31 Dec 2018 should be	$65,040	$20,565
Less: Value on 31/ Dec 2018	$52,560	$13,805
Equipment Sold and reversal of Equivalent Accumulated Depreciation	$12,480	$6,760

Working note : Journal Entry for Sales of Equipment
Loss on Sale of Equipment	$2,770.00
Accumulated Depreciation	$6,760.00
Cash Proceed from Sales	$2,950.00
Equipment		$12,480.00