Equipment was acquired at the beginning of the year at a cost of $550,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,205. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sol at the end of year eight for $95,704. Round your answer to the nearest cent. Enter your answer as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the neares cent.
Equipment was acquired at the beginning of the year at a cost of $550,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,205. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sol at the end of year eight for $95,704. Round your answer to the nearest cent. Enter your answer as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the neares cent.
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 2RE: Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual...
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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:Šale of Equipment
Equipment was acquired at the beginning of the year at a cost of $550,000. The equipment was depreciated using the straight-line method
based on an estimated useful life of 9 years and an estimated residual value of $44,205.
a. What was the depreciation for the first year? Round your answer to the nearest cent.
b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold
at the end of year eight for $95,704. Round your answer to the nearest cent. Enter your answer as a positive amount.
$
c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest
cent.
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