Question
On October 1, 2021, Walmart decides to sell a piece of equipment they purchased on January 1, 2018 for $120,000. At the time of purchase,
On October 1, 2021, Walmart decides to sell a piece of equipment they purchased on January 1, 2018 for $120,000. At the time of purchase, Walmart estimated the equipment was going to have an estimated useful life of 5 years and an estimated residual value of $35,000. The company uses straight-line depreciation. The following table shows the balance of relevant accounts on December 31, 2020. Note that depreciation has NOT been recorded for 2021.
Debit | Credit | |
Equipment | $120,000 | |
Accumulated Depreciation - Equipment | $51,000 |
To do...
1. Prepare the journal entry to record the depreciation expense for 2021.
2. Prepare the journal entry to record the disposition on October 1, 2020 assuming the equipment was sold for $50,000 cash.
3. Prepare the journal entry to record the disposition on October 1, 2020 assuming the equipment was exchanged for $40,000 cash and a machine valued at $35,000
Write your calculations below:
Part 1
General Journal | |||
Date | Account Titles and Explanation | Debit | Credit |
Part 2
General Journal | |||
Date | Account Titles and Explanation | Debit | Credit |
Part 3
General Journal | |||
Date | Account Titles and Explanation | Debit | Credit |
Calculations:
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