Qasim Manufacturing Ltd. has three assets. Their costs, estimated residual value, useful life in years, and their carrying value on January 1, 2014, are listed in the following table:

During 2014, Qasim completed the following transactions related to asset retirement: April 1 Sold Equipment A for $42,500 cash.
July 31 Sold Equipment B for $112,500; received $12,500 cash and an interest-bearing (6%) note receivable for the remainder due on
July 31, 2015 October 2 Sold Equipment C for $30,000; received $20,000 and a note receivable due on December 31, 2014.
Requirements
1. What is the age of each asset on January 1, 2014?
2. Prepare all journal entries related to the disposal of each of the assets in 2014.
3. Record adjusting entries on December 31, 2014.
4. What is the total gain or loss from the disposal of these three assets?

Transcribed Image Text:

CostResidual Value Useful Life Carrying Value Equipment A Equipment B Equipment C $125,000 224,000 86,000 $5,000 8,000 2,000 15 12 $ 46,250 101,600 38,750