1. Disposal of an asset. From pages 7-7 and 7-8 of the VLN, the company sold the mower after using it for a year and a half for $6,000. In recording the sale, they would:Group of answer choicesA. Debit a loss for $2,000B. Debit cash for $2,000C. Credit a gain for $1,000D. Credit accumulated depreciation for $3,0002. From page 7-8 of the VLN, what is the net profit margin in the practice problem on the bottom of the page? Do not include the % sign, carry to one decimal place. ___._% Mower JAccumulated Depreciation8,0002,000Total accumulated depreciation at time of sale: $Book value of the asset at the time of sale is: $Record the sale of the mower for $5,000:Cash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerRecord the sale of the mower for $6,000:ash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerRecord the sale of the mower for $4,000:Cash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerANALYSISProfit Margin (net profit margin):Question: For each dollar of sales, how much profit is thecompany making?Net incomeProfit margin =x 100 = NPM%Net salesPractice: Quality Resort Toys had sales of $1,900,000; net saleswere $1,880,000 with cost of goods sold of $1,000,000 resultingin net income of $235,000.Determine the Net Profit margin % Year 2Depreciation expenseAccumulated depreciationBook valueYear 3Depreciation expenseAccumulated depreciationBook valuePartial Year DepreciationAssume the stamping machine was purchased on October 1“, using straight-linedepreciation, depreciation expense for year 1 would be:Change in EstimateDetermine book value before the change in estimateDetermine the remaining useful life based on the change inestimateDetermine the new residual value based on the change inestimateRecalculate depreciation expense using the book value prior tothe change in estimate as the “new cost" and use the newresidual value and remaining useful life.Depreciation expense after change in estimate =prior to change – Residual valueBVRemainingLife in yearsPART C: ASSET DISPOSITION- Record depreciation for time used in the year of disposalRemoveassetfrom books (Asset and AccumulatedDepreciation (XA))- Record gain/loss from removal of asset, if any.Practice: Landscape Company sells a mower it used in itsbusiness. Acquisition (historical) cost was $8,000, 4 year usefullife, no residual value; mower is sold after 1.5 years of use.Calculate annual depreciation (straight line): $Calculate depreciation for the year of sale. SRecord depreciation in the year of sale:Depreciation expense (E+àSE-)Accumulated depreciation (XA+)

Name: 1. Disposal of an asset. From pages 7-7 and 7-8 of the VLN, the compan
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Description: 1. Disposal of an asset. From pages 7-7 and 7-8 of the VLN, the company sold the mower after using it for a year and a half for $6,000. In recording the sale, they would:Group of answer choicesA. Debit a loss for $2,000B. Debit cash for $2,000C. Cre

Question

1. Disposal of an asset. From pages 7-7 and 7-8 of the VLN, the company sold the mower after using it for a year and a half for $6,000.  In recording the sale, they would:Group of answer choicesA. Debit a loss for $2,000B. Debit cash for $2,000C. Credit a gain for $1,000D. Credit accumulated depreciation for $3,0002. From page 7-8 of the VLN, what is the net profit margin in the practice problem on the bottom of the page?  Do not include the % sign, carry to one decimal place.  ___._% Mower JAccumulated Depreciation8,0002,000Total accumulated depreciation at time of sale: $Book value of the asset at the time of sale is: $Record the sale of the mower for $5,000:Cash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerRecord the sale of the mower for $6,000:ash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerRecord the sale of the mower for $4,000:Cash (A+)Accumulated depreciation (XA- àA+)Mower (A-)Record the sale of mowerANALYSISProfit Margin (net profit margin):Question: For each dollar of sales, how much profit is thecompany making?Net incomeProfit margin =x 100 = NPM%Net salesPractice: Quality Resort Toys had sales of $1,900,000; net saleswere $1,880,000 with cost of goods sold of $1,000,000 resultingin net income of $235,000.Determine the Net Profit margin % Year 2Depreciation expenseAccumulated depreciationBook valueYear 3Depreciation expenseAccumulated depreciationBook valuePartial Year DepreciationAssume the stamping machine was purchased on October 1“, using straight-linedepreciation, depreciation expense for year 1 would be:Change in EstimateDetermine book value before the change in estimateDetermine the remaining useful life based on the change inestimateDetermine the new residual value based on the change inestimateRecalculate depreciation expense using the book value prior tothe change in estimate as the “new cost&#34; and use the newresidual value and remaining useful life.Depreciation expense after change in estimate =prior to change – Residual valueBVRemainingLife in yearsPART C: ASSET DISPOSITION- Record depreciation for time used in the year of disposalRemoveassetfrom books (Asset and AccumulatedDepreciation (XA))- Record gain/loss from removal of asset, if any.Practice: Landscape Company sells a mower it used in itsbusiness. Acquisition (historical) cost was $8,000, 4 year usefullife, no residual value; mower is sold after 1.5 years of use.Calculate annual depreciation (straight line): $Calculate depreciation for the year of sale. SRecord depreciation in the year of sale:Depreciation expense (E+àSE-)Accumulated depreciation (XA+)

Accepted Answer

Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…