Ch.10 eBook Show Me How Print Item 1. EX.10.01 2. EX.10.09.ALGO 3. EX.10.11.ALGO 4. EX.10.13 5. EX.10.18.ALGO Disposal of Fixed Asset Equipment acquired on January 6 at a cost of $209,800 has an estimated useful life of 8 years and an estimated residual value of $27,400. a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 22,800 6. EX.10.19.ALGO Year 2 22,800 7. EX.10.25 22,800 8. PR.10.02.ALGO Year 3 b. What was the book value of the equipment on January 1 of Year 4? 141,400 9. PR.10.06.ALGO Feedback Check My Work Asset cost minus residual value equals depreciable cost. Asset cost minus accumulated depreciation equals book value. The Accumulated Depreciation account is a permanent account and therefore the balance in the account grows each year of the asset's life. CO c. Assuming that the equipment was sold on January 3 of Year 4 for $134,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash Accumulated Depreciation-Equipment Loss on Sale of Equipment Equipment Feedback Check My Work 134,300 Compare the book value amount to the sale price. If the book value is less than the sale price, the asset was sold for a gain. If the book value is more than the sale price, the equipment was sold for a loss. d. Assuming that the equipment had been sold on January 3 of Year 4 for $144,200 instead of $134,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Cash Accumulated Depreciation-Equipment Equipment Gain on Sale of Equipment Feedback Feedback Check My Work Progress: 5/9 items Previous Next