Mercury Inc. purchased equipment in 2016 at a cost of $400,000. The equipment was expected to produce 700,000units over the next five years and have a residual value of $50,000. The equipment was sold for $210,000 part waythrough 2018. Actual production in each year was: 2016 = 100,000 units; 2017 = 160,000 units; 2018 = 80,000units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposaldate.Required:1. Prepare the journal entry to record the sale.2. Assuming that the equipment was sold for $245,000, prepare the journal entry to record the sale.
Mercury Inc. purchased equipment in 2016 at a cost of $400,000. The equipment was expected to produce 700,000units over the next five years and have a residual value of $50,000. The equipment was sold for $210,000 part waythrough 2018. Actual production in each year was: 2016 = 100,000 units; 2017 = 160,000 units; 2018 = 80,000units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposaldate.Required:1. Prepare the journal entry to record the sale.2. Assuming that the equipment was sold for $245,000, prepare the journal entry to record the sale.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mercury Inc. purchased equipment in 2016 at a cost of $400,000. The equipment was expected to produce 700,000
units over the next five years and have a residual value of $50,000. The equipment was sold for $210,000 part way
through 2018. Actual production in each year was: 2016 = 100,000 units; 2017 = 160,000 units; 2018 = 80,000
units. Mercury uses units-of-production
date.
Required:
1. Prepare the
2. Assuming that the equipment was sold for $245,000, prepare the journal entry to record the sale.
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