Question
Question (1) On January 1, 2010, XYZ Co purchased equipment for $550,000 . XYZ expects the equipment to remain useful for 5 years and to
Question (1)
On January 1, 2010, XYZ Co purchased equipment for $550,000. XYZ expects the
equipment to remain useful for 5 years and to have a residual value of $50,000. The company
uses the straight line method to depreciate its equipment. The company sold the equipment
on January 1, 2012 for $370,000 for cash.
Required:
- Compute the annual Depreciation expense for each of 2010 and 2011.
2A: Record the journal entry for Depreciation in 2011.
| Date | Accounts | DR | CR |
| 12/31/2011
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2B: Record the journal entry for the sale of the equipment on January 1, 2012.
| Date | Accounts | DR | CR |
| 1/1/2012
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
