The following are some transactions of Ivanhoe Company for 2024. Ivanhoe Company uses straight-line depreciation and has a December 31 year end. Apr. 1 July 30 Retired a piece of equipment that was purchased on January 1, 2015, for $49,000. The equipment had an expected useful life of 10 years with no residual value. (a) Sold equipment for $1,700 cash. The equipment was purchased on January 3, 2022, for $13,680 and was depreciated over an expected useful life of three years with no residual value. Nov. 1 Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old vehicle had been purchased on November 1, 2018, at a cost of $30,000. The estimated useful life was eight years and the estimated residual value was $6,000. The fair value of the old vehicle was $8,300 on November 1, 2024. For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if required. (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. List debit entry before credit entry. Record journal entries in the order presented in the problem.)
The following are some transactions of Ivanhoe Company for 2024. Ivanhoe Company uses straight-line depreciation and has a December 31 year end. Apr. 1 July 30 Retired a piece of equipment that was purchased on January 1, 2015, for $49,000. The equipment had an expected useful life of 10 years with no residual value. (a) Sold equipment for $1,700 cash. The equipment was purchased on January 3, 2022, for $13,680 and was depreciated over an expected useful life of three years with no residual value. Nov. 1 Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old vehicle had been purchased on November 1, 2018, at a cost of $30,000. The estimated useful life was eight years and the estimated residual value was $6,000. The fair value of the old vehicle was $8,300 on November 1, 2024. For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if required. (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. List debit entry before credit entry. Record journal entries in the order presented in the problem.)
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...
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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:For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if
required. (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. List debit entry before credit entry. Record journal entries in the order
presented in the problem.)
Date
Apr. 1
to
Account Titles
Depreciation Expense
Accumulated Depreciation - Equipment
Debit
4900
Credit
4900
Transcribed Image Text:The following are some transactions of Ivanhoe Company for 2024. Ivanhoe Company uses straight-line depreciation and has a
December 31 year end.
Apr. 1
July 30
Nov. 1
(a)
Retired a piece of equipment that was purchased on January 1, 2015, for $49,000. The equipment had an expected
useful life of 10 years with no residual value.
Sold equipment for $1,700 cash. The equipment was purchased on January 3, 2022, for $13,680 and was depreciated
over an expected useful life of three years with no residual value.
Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old
vehicle had been purchased on November 1, 2018, at a cost of $30,000. The estimated useful life was eight years and
the estimated residual value was $6,000. The fair value of the old vehicle was $8,300 on November 1, 2024.
For each of these disposals, prepare a journal entry to record depreciation from January 1, 2024, to the date of disposal, if
required. (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. List debit entry before credit entry. Record journal entries in the order
presented in the problem.)
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