Question
Sullivan Sales purchased a machine on January 1, 2015 which cost $450,000. The machine had a residual value of $50,000 and a useful life of
Sullivan Sales purchased a machine on January 1, 2015 which cost $450,000. The machine had a residual value of $50,000 and a useful life of 10 years. Sullivan Sales can replace this machine with one that is more efficient and decides to sell the old machine for $100,000 on July 1, 2017.
Required:
Prepare the appropriate journal entry to record the sale of this machine, assuming the company uses the double-declining-balance method of depreciation. The fiscal year ends on December 31.
Depreciation Schedule:
| Year | Book Value Beginning of Year | Rate | Annual Depreciation | Accumulated Depreciation | Book Value
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| Date | Account | Debit | Credit |
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