M8-15 Recording the Sale of PPE Assets Gaver Company sold machinery that had originally cost $75,000 for $25,000 in cash. The machinery was three years old and had been depreciated using the double-declining-balance method assuming a five- year useful life and a residual value of $5,000. a. Prepare a journal entry to record this sale. b. Using the financial statement effects template, show how the sale of the machinery affects the balance sheet and income statement

Q: ABC Company, whose fiscal year ends on December 31, 20x1, purchased a unit of equipment for a total…

A: Formula: Straight line method = ( Cost of Asset - salvage value ) / Useful life

Q: ABC Corp uses the double declining balance method to depreciate a machine purchased on June 30, 20X1…

A: Depreciation:   It is the reduction in the value of the asset over the period. This includes normal…

Q: Required information PB9-1 (Algo) Computing Acquisition Cost and Recording Depreciation under Three…

A: The total cost of an asset that is to be capitalized includes acquisition price, installation costs,…

Q: The Pack Company purchased an office building for $4,500,000. The building had an estimated useful…

A: Depreciation expense is part of cost of the asset charged as expense in the income statement.…

Q: Gruman Company purchased a machine for $220,000 on January 2, 2019. It made the following estimates:…

A: Solution:-1 Computation of the depreciation expense for 2019 and 2020 under each of the following…

Q: SE9-3 Depreciation expense Using the Double-Declining Balance method The Pack Company purchased an…

A: Double-declining balance method: The double-declining balance method of depreciation, also known as…

Q: ABC Corp uses the 150% declining balance method to depreciate a machine purchased on Jan 1, 20X1 for…

A: Depreciation is the gradual conversion of the cost of a  fixed asset into expense. It does not mean…

Q: Equipment acquired on January 9, 20Y3, at a cost of $633,000, has an estimated useful life of 16…

A: Formulas used: Depreciation expense= (Original cost-Residual value)/Estimated useful life

Q: The following data relate to a firm’s purchase of a machine used in the manufacture of its product:…

A: Acquisition cost of the machine = Invoice Price + Applicable sales tax +  Freight + Cost of…

Q: P9-7A Express Co. purchased equipment on March 1, 2012, for $95,000 on account. The equipment had an…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: P9-7A Express Co. purchased equipment on March 1, 2012, for $95,000 on account. The equipment had an…

A: 1. Depreciation Calculation   CALCULATION PARTICULAR AMOUNT       A Cost of Equipment on…

Q: E11-15 Asset Impairment On January 1, 2015, Vallahara Company purchased machinery for $650,000,…

A: Impairment Loss Impairment Loss = Carrying Amount - Recoverable Amount Recoverable Amount…

Q: Compute depreciation under: (i) straight line method (ii) unit of output (iii) working hours…

A: Depreciation  under straight line method = (Cost of Asset - Salvage value / useful life )…

Q: . On January 1, 2018 an entity purchased for P4,800,000 machine with useful life of ten years on…

A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/10 years) x 2 = 20%

Q: E9-7 Wang Co. has delivery equipment that cost $50,000 and has been depreciated $24,000.…

A: The net asset value of an asset is determined to cost less depreciation. If the asset is sold for a…

Q: P9-31A Determining asset cost, preparing depreciation schedules (3 methods), and identifying…

A: Depreciation: Depreciation can be defined as the gradual charge on fixed assets of the entity…

Q: On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was…

A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…

Q: E11-2 Depreciation Methods Sorter Company purchased equipment for $200,000 on January 2, 2019. The…

A: Depreciation: Depreciation is an accounting method for distributing a tangible or physical asset's…

Q: The Lickert Company is a coal company based in West Virginia. The company recently purchased a new…

A: Depreciation is the allocation of the cost of Assets over its useful life

Q: E9-6 Kelm Company purchased a new machine on October 1, 2011, at a cost of $120,000. The company…

A: a) Depreciation under straight line method: Given cost = $120,000 Residual value = $12,000 Life = 5…

Q: Lavender Company provided the following data related to a machinery on the date of revaluation:…

A: Date Account Titles Debit Credit xxx Revaluation reserve A/c Dr 216,000     To  Retained…

Q: BE10-14: Ottawa Corporation owns machinery that cost $20,000 when purchased on July 1, 2007.…

A: To record the reduction in the efficiency, the company will charge depreciation each year. The…

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A: Gain (loss) on sale of Building = sales value - book value = $400,000 - $450,000 = $(50,000)

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A: The cost of equipment includes the purchase price, sales tax, freight costs, installation costs or…

Q: M8-12 Computing Depreciation Under Straight-Line and Double-Declining-Balance A delivery van costing…

A:

Q: Use the following facts for questions 4-6. Rearden Co. has the plant assets shown below. Assume…

A: Sum of years  = 1+2+3+4+5+6+7+8                        = 36 years

Q: *P9-8B Miriam Corporation purchased machinery on January 1, 2014, at a cost of $380,000. The…

A: Depreciation methods include different types of methods which the company can apply to depreciate…

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A: Journal entries of disposal are as follows: Resultant table:

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A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: On January 2, 2012, Mosler, Inc., purchased equipment for $85, 000. The equipment was expected to…

A: Annual Depreciation (straight line method) = (Cost of the assets - Residual value) / Expected life…

Q: E11-15 Asset Impairment On January 1, 2015, Vallahara Company purchased machinery for $650,000,…

A: Impairment An asset is impaired when its recovering amount is less than carrying amount.

Q: ABC Corp uses the double declining balance method to depreciate a machine purchased on Jan 1, 20X1…

A: >Accounting principle states that the cost of the long term assets (like equipment) is to be…

Q: On January 1, 20x1, ABC Company acquired a machine with an invoice price of ₱300,000 subject to a…

A: Discount on payment =  invoice price x discount rate = ₱300,000 x 2% = ₱6,000

Q: amela Company acquired a welding machine on account with an invoice price of P5,000,000 subject to a…

A: Depreciation under the Straight Line method is computed under the following method: Depreciation =…

Q: Jamela Company acquired a welding machine on account with an invoice price of P5,000,000 subject to…

A: Cost of asset includes the invoice price less any cash discount and all other costs which are…

Q: E9-6 (Algo) Computing and Recording Straight-Line Depreciation [LO 9-3] Yazzie Incorporated bought a…

A: Given, =A machine at the beginning of the year at a cost of $42,000. =The estimated useful life was…

Q: Sam’s Catering purchased a delivery vehicle of R150 000 on 1 June 2021 on credit. Sam was advised…

A:

Q: The purchase of the assets of Coffee. 2 Depreciation and amortization expense on the purchased…

A:

Q: gain or loss from this sale

A: Annual depreciation under straight line method = (Cost - Residual value)/Estimated life in years…

Q: On January 1, 2020, Techno Company sold a machine for RO15,000 cash. The Machine originally cost RO…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: TB MC Qu. 08-106 Marlow Company purchased a point of sale... Marlow Company purchased a point of…

A: Determine depreciation expense for the first year.

Q: A delivery truck costing $20, 000 is expected to have a $2,000 salvage value at the end of its…

A: Double declining depreciation rate = Straight line depreciation rate x 2 = (100/4 years) x 2 = 50%

Q: Cost of land site, which included an old apartment building appraised at $75,000   $173,000 Legal…

A: Balance sheet is a statement of assets  and liabilities of a business at a period of time…

Q: E8-28 Computing Depreciation and Accounting for a Change of Estimate In January 2016, Rankine…

A: Requirement a)Calculate the annual depreciation expense using the straight line depreciation.

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.