Ql- (a)- Ford Company purchased equipment in 2010 for $150,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2016, there was $98,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $40,000. Prepare the appropriate journal entries to remove the equipment from the books of Ford Company on March 31, 2017. (b) Samsung Company sold a machine for $15,000. The machine originally cost $35,000 in 2014 and $8,000 was spent on a major overhaul in 2017 (charged to the Equipment account). Accumulated Depreciation on the machine to the date of disposal was $28,000. Prepare the appropriate journal entry to record the disposition of the machine. (c) Jorgea Company sold office equipment that had a book value of $12,000 for $16,000. The office equipment originally cost $40,000 and it is estimated that it would cost $50,000 to replace the office equipment. Prepare the appropriate journal entry to record the disposition of the office equipment.
Ql- (a)- Ford Company purchased equipment in 2010 for $150,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2016, there was $98,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2017, the equipment was sold for $40,000. Prepare the appropriate journal entries to remove the equipment from the books of Ford Company on March 31, 2017. (b) Samsung Company sold a machine for $15,000. The machine originally cost $35,000 in 2014 and $8,000 was spent on a major overhaul in 2017 (charged to the Equipment account). Accumulated Depreciation on the machine to the date of disposal was $28,000. Prepare the appropriate journal entry to record the disposition of the machine. (c) Jorgea Company sold office equipment that had a book value of $12,000 for $16,000. The office equipment originally cost $40,000 and it is estimated that it would cost $50,000 to replace the office equipment. Prepare the appropriate journal entry to record the disposition of the office equipment.
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 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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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:Q1- (a)- Ford Company purchased equipment in 2010 for $150,000 and estimated a $10,000 salvage
value at the end of the equipment's 10-year useful life. At December 31, 2016, there was
$98,000 in the Accumulated Depreciation account for this equipment using the straight-line
method of depreciation. On March 31, 2017, the equipment was sold for $40,000.
Prepare the appropriate journal entries to remove the equipment from the books of Ford
Company on March 31, 2017.
(b) Samsung Company sold a machine for $15,000. The machine originally cost $35,000 in 2014
and $8,000 was spent on a major overhaul in 2017 (charged to the Equipment account).
Accumulated Depreciation on the machine to the date of disposal was $28,000.
Prepare the appropriate journal entry to record the disposition of the machine.
(c) Jorgea Company sold office equipment that had a book value of $12,000 for $16,000. The
office equipment originally cost $40,000 and it is estimated that it would cost $50,000 to
replace the office equipment.
Prepare the appropriate journal entry to record the disposition of the office equipment.
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