Instructions New ithographic equipment, acquired at a cost of $850.200 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $95,660. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining balance method was selected. In the first week of the fifth year, on March 4, the equipment was sold for $141,422. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight ling method and (b) the double-declining-balance method Round your answers to the nearest whole dollar 2. Journalize the entry to record the sale assuming the manager chose the double-declining-balance method. Refer to the Chart of Accounts for exact wording of account titles. 3. Journalize the entry to record the sale in (2), assuming that the equipment was sold for $96,962 instead of $141,422. Refer to the Chart ar Accounts for exact wording of account titles. art of Accounts CHART OF ACCOUNTS General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 112 Accounts Receivable 620 Gain on Sale of Delivery Truck 114 Interest Receivable 621 Gain on Sale of Equipment 115 Notes Receivable EXPENSES 116 Merchandise Inventory 117 Supplies 510 Cost of Merchandise Sold 520 Salaries Expense 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 531 Rent Expense 532 Depreciation Expense-Equipment 131 Accumulated Depletion 132 Goodwill 533 Depletion Expense 524 Repairs and Maintenance Expense Chart of Accounts 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 529 Selling Expenses 131 Accumulated Depletion 132 Goodwill 133 Patents 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends Journal 2 on March 4, journalize the entry to record the sale assuming the manager chose the double declining balance method. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 3. On March 4, journalire the entry to record the sale in (2), assuming that the equipment was sold for $98,962 instead of $141,422. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 3
