Question
Activity 1 Master Company purchased equipment on January 2, 20x1 for $204,000 and estimated an $14,000 salvage value at the end of the equipment's 10-year
Activity 1
Master Company purchased equipment on January 2, 20x1 for $204,000 and estimated an $14,000 salvage value at the end of the equipment's 10-year useful life. On December 31, 20x7, there was $133,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On June 30, 20x8, the equipment was sold for $55,500.
Instructions:
1. Compute annual straight-line depreciation.
2. Compute the accumulated depreciation at disposal date (June 30, 20x8).
3. Compute the book value of the equipment at disposal date (June 30, 20x8).
4. Prepare the appropriate journal entries to record the disposition on the equipment.
Activity 2
Roger Company sold equipment for $15,000 on October 31, 20x8. The equipment originally cost $35,000 in 20x1 and $8,000 was spent on a major overhaul in 20x6 (charged to the Equipment account). Accumulated Depreciation on the equipment to the date of disposal was $28,000.
Instructions:
1. Prepare the appropriate journal entry to record the disposition of the equipment.
2. Show calculations.
Activity 3
On March 31, 20x9, Adler Company sold equipment that had a book value of $23,500 for $25,000. The equipment originally cost $55,000 and it is estimated that it would cost $67,000 to replace the equipment.
Instructions:
1. Prepare the appropriate journal entry to record the disposition of the equipment.
2. Show calculations.
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