Prepare the journal entries for the disposal of plant assets in each of the separate transactions.
Brown Company purchased equipment in 2008 for $150,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2014, there was $98,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2015, the equipment was sold for $40,000.
Date Account Titles Ref. Debit Credit
Finney Company sold a machine for $15,000. The machine originally cost $35,000 in 2012 and $8,000 was spent on a major overhaul in 2015 (charged to the Equipment account). Accumulated Depreciation on the machine to the date of disposal was $28,000.
Date Account Titles Ref. Debit Credit
Stanley Company sold office equipment that had a book value of $12,000 for $16,000. The office equipment originally cost $40,000 and it is estimated that it would cost $50,000 to replace the office equipment.
Date Account Titles Ref. Debit Credit
Prepare the journal entries for the disposal of plant assets in each of the separate transactions.
Brown Company purchased equipment in 2008 for $150,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2014, there was $98,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2015, the equipment was sold for $40,000.
| Date | Account Titles | Ref. | Debit | Credit |
Finney Company sold a machine for $15,000. The machine originally cost $35,000 in 2012 and $8,000 was spent on a major overhaul in 2015 (charged to the Equipment account). Accumulated Depreciation on the machine to the date of disposal was $28,000.
| Date | Account Titles | Ref. | Debit | Credit |
Stanley Company sold office equipment that had a book value of $12,000 for $16,000. The office equipment originally cost $40,000 and it is estimated that it would cost $50,000 to replace the office equipment.
| Date | Account Titles | Ref. | Debit | Credit |
Related questions
Equipment acquired on January 8 at a cost of $165,730 has an estimated useful life of 17 years, has an estimated residual value of $8,650, and is depreciated by the straight-line method.
| A. | What was the book value of the equipment at December 31 the end of the fourth year? |
| B. | Assuming that the equipment was sold on April 1 of the fifth year for $120,655, journalize the entries to record (1) depreciation for the three months until the sale date and (2) the sale of the equipment. Refer to the Chart of Accounts for exact wording of account titles Round your answer to the nearest whole dollar. |
First Question
A. What was the book value of the equipment at December 31 the end of the fourth year?
Journal
B. Assuming that the equipment was sold on April 1 of the fifth year for $120,655, journalize the entries to record the following (Refer to the Chart of Accounts for exact wording of account titles. Round your answer to the nearest whole dollar.):
1. Depreciation for the three months until the sale date
PAGE 1
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
| 1 | ||||||||
| 2 |
2. The sale of the equipment
PAGE 2
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
|---|---|---|---|---|---|---|---|---|
| 1 | ||||||||
| 2 | ||||||||
| 3 | ||||||||
| 4 |
1
| A machine originally had an estimated useful life of 6 years,but after 2 complete years, it was decided that the originalestimate of useful life should have been 11 years. At that pointthe remaining cost to be depreciated should be allocated over theremaining: 2.
|
3.
Wickland Company installs a manufacturing machine in itsproduction facility at the beginning of the year at a cost of$108,000. The machine's useful life is estimated to be 4 years, or140,000 units of product, with a $2,000 salvage value. During itssecond year, the machine produces 28,000 units of product.Determine the machines' second year depreciation under theunits-of-production method. (Do not round intermediatecalculations.) |
$21,200.
$26,500.
$27,000.
$21,600.
$27,500.
4.
Gaston owns equipment that cost $13,500 with accumulateddepreciation of $2,700. Gaston asks $12,700 for the equipment butsells the equipment for $9,700. Which of the following would not bepart of the journal entry to record the disposal of theequipment? |
Debit Accumulated Depreciation $2,700.
Credit Equipment $13,500.
Debit Loss on Disposal of Equipment $1,100.
Credit Gain on Disposal of Equipment $1,100.
Debit Cash $9,700.
