Question
Tahir's Tech Company purchases a new server for $3,000 on January 1st, Year 1. The company expects to use the server for about five years
Tahir's Tech Company purchases a new server for $3,000 on January 1st, Year 1. The company expects to use the server for about five years before reselling it, and managers estimate that someone will pay $900 for the server when it is resold.
a. Calculate the net book value of the server at the end of Year 2, assuming Tahir uses the double-declining balance method of calculating depreciation.
b. At the end of Year 5, Tahir sells the server for $905. Answer the following related to the journal entry that Tahir will make to record this sale. If there is no debit or credit to an account, put "0''.
- Tahir will debit Accumulated Depreciation for ?
- Tahir will debit Cash for ?
- Tahir will debit Loss on Sale for ?
- Tahir will credit Gain on Sale for ?
- Tahir will credit Equipment for ?
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