On September 30, 2022, the company sold old equipment for $119,600. The equipment was purchased on January 1, 2020, for $249,600 and was estimated to have a $41,600 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) On June 30, 2022, the company sold old equipment for $62,400. The equipment originally cost $93,600 and had accumulated depreciation to the date of disposal of $39,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
On September 30, 2022, the company sold old equipment for $119,600. The equipment was purchased on January 1, 2020, for $249,600 and was estimated to have a $41,600 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) On June 30, 2022, the company sold old equipment for $62,400. The equipment originally cost $93,600 and had accumulated depreciation to the date of disposal of $39,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...
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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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Question
Prepare the journal entries to record the following transactions for Wildhorse Company, which has a calendar year end and uses the straight-line method of depreciation .
On September 30, 2022, the company sold old equipment for $119,600. The equipment was purchased on January 1, 2020, for $249,600 and was estimated to have a $41,600 salvage value at the end of its 5-year life. Depreciation on the equipment has been recorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
On June 30, 2022, the company sold old equipment for $62,400. The equipment originally cost $93,600 and had accumulated depreciation to the date of disposal of $39,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Transcribed Image Text:On June 30, 2022, the company sold old equipment for $62,400. The equipment originally cost $93,600 and had accumulated
depreciation to the date of disposal of $39,000. (Credit account titles are automatically indented when the amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
June 30,
2022
Transcribed Image Text:Prepare thne Journal entries to record the following transactions for Wilahorse Company, which has a calendar year end and uses the
straight-line method of depreciation.
On September 30, 2022, the company sold old equipment for $119,600. The equipment was purchased on January 1, 2020, for
$249,600 and was estimated to have a $41,600 salvage value at the end of its 5-year life. Depreciation on the equipment has
been recorded through December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
September 30, 2022
(To record depreciation expense for the first 9 months
of 2022)
(To record sale of delivery equipment)
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