Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

pplease her with this it has multiple parts On March 1, 2017, Mickey Company purchased machinery for $500,000. Mickey estimates that the machinery has a

pplease her with this it has multiple parts
image text in transcribed
image text in transcribed
On March 1, 2017, Mickey Company purchased machinery for $500,000. Mickey estimates that the machinery has a 10-year useful life and a $30,000 salvage value, Mickey uses the sum-of-years depreciation method and recorded depreciation normally during 2017 and 2018 On December 31, 2019, the machinery was sold for $240,000. 2017 Depreciation Expense: $71,212 (March 1, 2017 - December 31, 2017) 2018 Depreciation Expense: $78,333 (January 1, 2018 - December 31, 2018) 2019 Depreciation Expense: $69,788 (January 1, 2019 - December 31, 2019) a. Based on this information, calculate net book value of the equipment on Dec 31, 2019 at the time of the sale $150,000 $219,333 $240,000 $280,667 b. Based on this information, what is the gain or loss on the sale of the equipment on Dec 31, 2019? Loss of $40,667 CLoss of $260,000 Gain of $260,000 Gain of $40,667 c. Based on this information, prepare Mickey's journal entry to record the sale on Dec 31, 2019: DR. Cash DR A/D DR. Loss on Sale CR. Machine $240,000 $219,333 $40,667 5500,000 DR. Cash DR. AD CR. Gain on Sale CR, Machine $240,000 $260,000 $40,667 $459,333 DR. Cash $240,000 DR. AND $40,667 DR. Loss on Sale $219,333 CR. Machine $500,000 DR. Cash DR. A/D CR. Gain on Sale CR Machine $240,000 $260,000 $219,333 $280,667

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

10th edition

978-1260481952

Students also viewed these Accounting questions