Equipment acquired on January 8 at a cost of $168,000 has an estimated useful life of 18 years, has an estimated residual value of $15,000, 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? 3,024,00 x Feedback V Check My Work Book value is the initial cost of the fixed asset minus the accumulated depreciation. b. Assume that the equipment was sold on April 1 of the fifth year for $125,000. 1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank.
Equipment acquired on January 8 at a cost of $168,000 has an estimated useful life of 18 years, has an estimated residual value of $15,000, 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? 3,024,00 x Feedback V Check My Work Book value is the initial cost of the fixed asset minus the accumulated depreciation. b. Assume that the equipment was sold on April 1 of the fifth year for $125,000. 1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 1RE: Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Entries for Sale of Fixed Asset
Equipment acquired on January 8 at a cost of $168,000 has an estimated useful life of 18 years, has an estimated residual value of $15,000, 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?
3,024,00 x
Feedback
V Check My Work
Book value is the initial cost of the fixed asset minus the accumulated depreciation.
b. Assume that the equipment was sold on April 1 of the fifth year for $125,000.
1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank.
Depreciation Expense-Equipment
Accumulated Depreciation-Equipment
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