Robert Sporting Goods Company had purchased some equipment (Q107) on January 1, 2014 for $104 000 with an estimated salvage value of $8 000 and a 10-year useful life. On December 31, 2020, there was $67 200 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. In preparation for expansion, on March 31, 2021, that equipment was sold for $21 000. Required: i) Complete the following schedule of useful working. Equipment (Q107): $ Cost Answer Salvage Value Answer Depreciable base Answer Annual Depreciation charge Answer Accumulated depreciation to the date of disposal Answer ii) Prepare the necessary journal entries to record the disposal of the equipment on March 31, 2021. When selecting from dropdown lists, if a line item does not apply, select NA and place zero in the field in the number column. Do not leave any number fields blank. March 31, 2021 Dr Answer $Answer CrAnswer $Answer Dr Cash $Answer Dr Answer $Answer Dr Answer $Answer Cr Answer $Answer Cr Answer $Answe
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.
Robert Sporting Goods Company had purchased some equipment (Q107) on January 1, 2014 for $104 000 with an estimated salvage value of $8 000 and a 10-year useful life. On December 31, 2020, there was $67 200 in the
Required:
i) Complete the following schedule of useful working.
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Equipment (Q107): |
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Cost |
Answer |
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Salvage Value |
Answer |
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Answer |
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Annual Depreciation charge |
Answer |
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Accumulated depreciation to the date of disposal |
Answer |
ii) Prepare the necessary
March 31, 2021
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Dr Answer |
$Answer |
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CrAnswer |
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$Answer |
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Dr Cash |
$Answer |
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Dr Answer |
$Answer |
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Dr Answer |
$Answer |
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Cr Answer |
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$Answer |
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Cr Answer |
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$Answer |
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