Astro Company sold equipment on July 1, 2021 for $75,000. The equipment had cost $210,000 and had $120,000 of accumulated depreciation as of January 1, 2021. The equipment is being annually depreciated at an amount of S24,000. Required: Prepare the necessary journal entries to: A. Update the depreciation for the equipment. B. Record the sale of the equipment.

Astro Company sold equipment on July 1, 2021 for $75,000. The equipment had cost $210,000 and had $120,000 of accumulated depreciation as of January 1, 2021. The equipment is being annually depreciated at an amount of S24,000. Required: Prepare the necessary journal entries to: A. Update the depreciation for the equipment. B. Record the sale of the equipment.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 7P: Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset,...

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Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
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Sweet Company purchased equipment on January 1, 2018, for $28,000. Suppose Sweet Company sold the equipment for $4,000 on December 31, 2019. Accumulated Depreciation as of December 31, 2019, was $11,000. Journalize the sale of the equipment, assuming straight-line depreciation was used.
Whispering Company owns equipment that cost $100,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $10,000 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Whispering Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) (d) (e) (f) (a) Sold for $59,000 on January 1, 2022. Sold for $59,000 on April 1, 2022. SR. Account Titles and Explanation (b) Sold for $21,000 on January 1, 2022. Sold for $21,000 on September 1, 2022. Repeat (a), assuming Whispering uses double-declining…
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Wildhorse Company owns equipment that cost $121,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $12,100 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Wildhorse Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) Sold for $73,000 on January 1, 2022. (b) Sold for $73,000 on April 1, 2022. (c) Sold for $25,500 on January 1, 2022. (d) Sold for $25,500 on September 1, 2022. (e) Repeat (a), assuming Wildhorse uses double-declining balance depreciation. (f) Repeat (c), assuming Wildhorse…
Grace Company owns equipment that cost $70,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on estimated salvage value of $7,000 and an estimated useful life of 5 years. Instructions: Prepare Grace Company’s journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (a) Sold for $40,000 on January 1, 2022.(b) Sold for $40,000 on April 1, 2022.(c) Sold for $15,000 on January 1, 2022.(d) Sold for $15,000 on September 1, 2022.(e) Repeat (a), assuming Grace uses double-declining balance depreciation. (f) Repeat (c), assuming Grace uses double-declining balance depreciation.
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