Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $170,000. The residual value of the equipment was estimated to be $20,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $54,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. + Complete this question by entering your answers in the tabs below. Required 1 No Prepare the journal entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. General Journal 1 Required 2 No 1 Answer is not complete. Event 1 Event 1 Cash Accumulated depreciation-equipment Loss on sale of equipment Equipment 1925 x 587px Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculation. Round your final answers to the nearest whole dollar amount. General Journal Cash Accumulated depreciation-equipment Gain on sale of equipment Equipment Size: 35.7KB < Required 1 Debit 54,000 Required 2 > Credit Debit 54,000 112,500 170,000 Credit 170,000 D
Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $170,000. The residual value of the equipment was estimated to be $20,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $54,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to record the sale. 2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. + Complete this question by entering your answers in the tabs below. Required 1 No Prepare the journal entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. General Journal 1 Required 2 No 1 Answer is not complete. Event 1 Event 1 Cash Accumulated depreciation-equipment Loss on sale of equipment Equipment 1925 x 587px Required 1 Required 2 Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculation. Round your final answers to the nearest whole dollar amount. General Journal Cash Accumulated depreciation-equipment Gain on sale of equipment Equipment Size: 35.7KB < Required 1 Debit 54,000 Required 2 > Credit Debit 54,000 112,500 170,000 Credit 170,000 D
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 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines 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:Howarth Manufacturing Company purchased equipment on June 30, 2020, at a cost of $170,000. The residual value of the
equipment was estimated to be $20,000 at the end of a five-year life. The equipment was sold on March 31, 2024, for $54,000.
Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based
on the number of months the asset is in service.
Required:
1. Prepare the journal entry to record the sale.
2. Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.
+
Complete this question by entering your answers in the tabs below.
Required 1
No
Prepare the journal entry to record the sale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
General Journal
1
Required 2
No
Event
1
1
Required 1 Required 2
Answer is not complete.
10
Event
1
Cash
Accumulated depreciation-equipment
Loss on sale of equipment
Equipment
1925 x 587px
Assuming that Howarth had instead used the double-declining-balance method, prepare the journal entry to record the sale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculation. Round your final answers to the nearest whole dollar amount.
General Journal
Cash
Accumulated depreciation-equipment
Gain on sale of equipment
Equipment
Size: 35.7KB
< Required 1
Debit
54,000
Required 2
Credit
Debit
54,000
112,500 X
170,000
Credit
170,000
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