Question
Fantastic Limited purchased an equipment for $160,000 on 1 January 2014. It has been depreciated using the straight-line method based on an estimated residual value
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Fantastic Limited purchased an equipment for $160,000 on 1 January 2014. It has been depreciated using the straight-line method based on an estimated residual value of $10,000 and an estimated useful life of 5 years. On 31 May 2014, the equipment was sold for cash of $90,000. The year end of Fantastic Limited is 31 December.
Required:
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(a) Prepare the journal entry to record depreciation expense on equipment for the year 2014 up to the date of disposal on 31 May 2014. (Narration is NOT required.) (2 marks)
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(b) Prepare journal entries to record the disposal of equipment on 31 May 2014.
Fantastic Limited purchased an equipment for $160,000 on 1 January 2014. It has been depreciated using the straight-line method based on an estimated residual value of $10,000 and an estimated useful life of 5 years. On 31 May 2014, the equipment was sold for cash of $90,000. The year end of Fantastic Limited is 31 December.
Required:
-
(a) Prepare the journal entry to record depreciation expense on equipment for the year 2014 up to the date of disposal on 31 May 2014. (Narration is NOT required.) (2 marks)
-
(b) Prepare journal entries to record the disposal of equipment on 31 May 2014.
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
13th Edition
978-0470423684
