Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2017. It has been depreciated

Question:

Pryce Company owns equipment that cost $65,000 when purchased on January 1, 2017. It has been depreciated using the straight-line method based on estimated salvage value of $5,000 and an estimated useful life of 5 years.

Instructions
Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations.
a. Sold for $31,000 on January 1, 2020.
b. Sold for $31,000 on May 1, 2020.
c. Sold for $11,000 on January 1, 2020.
d. Sold for $11,000 on October 1, 2020.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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