Equipment was acquired at the beginning of the year at a cost of $215,000. The equipment was
Question:
a. What was the depreciation for the first year?
b. Assuming the equipment was sold at the end of the eighth year for $128,000, determine the gain or loss on the sale of the equipment.
c. Journalize the entry to record the sale.
Step by Step Answer:
a 9750 215000 3950018 b 9000 loss 1...View the full answer
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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