Answered: Equipment acquired on January 9, 20Y3,…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter3: Basic Accounting Systems: Accrual Basis

Section: Chapter Questions

Problem 3.23E: Adjustment for depreciation The estimated amount of depredation on equipment for the current year is...

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Sale of an Asset

Equipment acquired on January 9, 20Y3, at a cost of $615,000, has an estimated useful life of 17 years, an estimated residual value of $123,000, and is depreciated by the straight-line method.

a. What was the book value of the equipment at the end of the fifth year, December 31, 20Y7? Round your interim calculations and final answer to the nearest dollar.
$fill in the blank 1

For decreases in accounts or outflows of cash, enter your answers as negative numbers. Round annual depreciation to the nearest dollar and use this amount in your follow-on calculations. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.

b1. Assuming that the equipment was sold on July 1, 20Y8, for $184,500, illustrate the effects on the accounts and financial statement of depreciation for the six months until the sale date.

Balance Sheet
Assets
Liabilities
Stockholders' Equity
Accumulated depreciation - equipment v
No effect v
No effect v
Retained earnings v
July 1.
Statement of Cash Flows
Income Statement
No effect v
Depreciation expense v
2. Assuming that the equipment was sold on July 1, 20Y8, for $184,500, illustrate the effects on the accounts and financial statement of the sale of the equipment.
Balance Sheet
Assets
Liabilities
Stockholders' Equity
Cash v
+ Equipment v
Accumulated depreciation - equipment v
No effect
Retained earnings v
July 1.
Statement of Cash Flows
Income Statement
Investing v
Loss on disposal of fixed Assets v
Feedback
V Check My Work

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