Entries for Sale of Fixed AssetEquipment acquired on January 8 at a cost of $136,520, has an estimated useful life of 17 years, has an estimated residual value of $7,150, and is depreciated by the straight-line method.a. What was the book value of the equipment at December 31 the end of the fourth year?$b. Assuming that the equipment was sold on April 1 of the fifth year for 99,007.1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required.Depreciation Expense-Equipment  Accumulated Depreciation-Equipment 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.Cash  Accumulated Depreciation-Equipment  Loss on Sale of Equipment  Equipment

Question
Asked Oct 25, 2019

Entries for Sale of Fixed Asset
Equipment acquired on January 8 at a cost of $136,520, has an estimated useful life of 17 years, has an estimated residual value of $7,150, 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 99,007.
1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required.

Depreciation Expense-Equipment

 

 


Accumulated Depreciation-Equipment

 


2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.

Cash

 

 


Accumulated Depreciation-Equipment

 

 


Loss on Sale of Equipment

 

 


Equipment

 

 

check_circleExpert Solution
Step 1

Hence, depreciation amount to be charged every year is $7,594. The difference in acquisition cost and the salvage value is divided by the estimated useful life to calculate the depreciation amount.

Acquistion cost - Estimated residual value
Amount of depreciation
Estimated useful life
$1,36,250-$7,150
17
$129,100
17
=$7,594
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Acquistion cost - Estimated residual value Amount of depreciation Estimated useful life $1,36,250-$7,150 17 $129,100 17 =$7,594

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Step 2

Hence, the book value of the equipment at the end of the fourth year on December 31 is $105,874. The amount charged as depreciation is same for all the years. The reason being, the method of charging depreciation is used here is SLM.

Particulars
Acquistion cost of equipment
Less: depreciation charged for the first year
Value of equipment at the end of first year
Less: depreciation charged for the second year
Value of equipment at the end of second year $121,062
Less: depreciation charged for the third year
Value of equipment at the end of third year
Less: depreciation charged for the fourth year
Vahue of equipment at the end of fourth year
Amount(S)
$136,250
(S7,594)
$128,656
(S7,594)
($7,594)
$113,468
(S7,594)
$105,874
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Particulars Acquistion cost of equipment Less: depreciation charged for the first year Value of equipment at the end of first year Less: depreciation charged for the second year Value of equipment at the end of second year $121,062 Less: depreciation charged for the third year Value of equipment at the end of third year Less: depreciation charged for the fourth year Vahue of equipment at the end of fourth year Amount(S) $136,250 (S7,594) $128,656 (S7,594) ($7,594) $113,468 (S7,594) $105,874

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Step 3

Hence, depreciation amount charged for the fifth year before the sale of equipment on A...

Particulars
1-Apr Depreciation
Equipment
(Being amount of depreciation charged
in the fifth year before the sale of equipment
Post ref. Debit(S) Credit(S)
Date
$1,899
$1,899
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Particulars 1-Apr Depreciation Equipment (Being amount of depreciation charged in the fifth year before the sale of equipment Post ref. Debit(S) Credit(S) Date $1,899 $1,899

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