Question
On December 31, 2017 ABC Company purchased equipment worth $270,000. The equipment has a useful life of six years and no residual value. Depreciation is
On December 31, 2017 ABC Company purchased equipment worth $270,000. The equipment has a useful life of six years and no residual value. Depreciation is recorded beginning the month after acquisition and will be recorded up until the month of disposal. The company uses the straight-line method of depreciation.
Required a) Given that the company's year end is December 31, complete the following table.
Do not enter dollar signs or commas in the input boxes. Round all dollar figure answers to the nearest whole number.
Year Cost of Long-Term Asset Depreciation Expense Accumulated Depreciation Net Book Value 2018 $270,000 $Answer $Answer $Answer 2019 $270,000 $Answer $Answer $Answer 2020 $270,000 $Answer $Answer $Answer 2021 $270,000 $Answer $Answer $Answer 2022 $270,000 $Answer $Answer $Answer 2023 $270,000 $Answer $Answer $Answer
b) On June 30, 2023, ABC Company sold the equipment for $5,000 Prepare the journal entry to record the depreciation on the disposal and the sale. You will need to recalculate the depreciation expense for 2023 from part a) to account for the sale part-way through the year.
Enter all debit accounts in alphabetical order.
Date Account Title and Explanation Debit Credit Jun 30 AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer To update depreciation before disposal Jun 30 AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck Answer To record the sale of equipment
On December 31, 2017 ABC Company purchased equipment worth $270,000. The equipment has a useful life of six years and no residual value. Depreciation is recorded beginning the month after acquisition and will be recorded up until the month of disposal. The company uses the straight-line method of depreciation.
Required a) Given that the company's year end is December 31, complete the following table.
Do not enter dollar signs or commas in the input boxes. Round all dollar figure answers to the nearest whole number.| Year | Cost of Long-Term Asset | Depreciation Expense | Accumulated Depreciation | Net Book Value |
| 2018 | $270,000 | $Answer | $Answer | $Answer |
| 2019 | $270,000 | $Answer | $Answer | $Answer |
| 2020 | $270,000 | $Answer | $Answer | $Answer |
| 2021 | $270,000 | $Answer | $Answer | $Answer |
| 2022 | $270,000 | $Answer | $Answer | $Answer |
| 2023 | $270,000 | $Answer | $Answer | $Answer |
b) On June 30, 2023, ABC Company sold the equipment for $5,000 Prepare the journal entry to record the depreciation on the disposal and the sale. You will need to recalculate the depreciation expense for 2023 from part a) to account for the sale part-way through the year.
Enter all debit accounts in alphabetical order.| Date | Account Title and Explanation | Debit | Credit |
| Jun 30 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | |
| AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | ||
| To update depreciation before disposal | |||
| Jun 30 | AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | |
| AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | ||
| AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | ||
| AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAllowance for Doubtful AccountsBad Debt ExpenseBuildingCashDepreciation ExpenseEquipmentGain on Disposal of AssetLandLoss on Disposal of AssetMachine (New)Machine (Old)Notes PayableNotes ReceivableTruck | Answer | ||
| To record the sale of equipment |
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