Question

Part III Marvel Company purchased motor vehicle costing $1,200,000 on 15 September 2017. The motor vehicle...

Part III

Marvel Company purchased motor vehicle costing $1,200,000 on 15 September 2017. The motor vehicle has an estimated useful life of 5 years and residual value of $200,000. Straight-line depreciation method is used. Half-year convention is adopted. On 5 March 2020, the company sold the motor vehicle for $400,000 cash. The company adjusts its accounts annually with the year-end at 31 December.

Required:

  1. (a) Prepare the journal entries to update the depreciation before disposal in 2020;

  2. (b) Prepare the journal entries on 5 March 2020 regarding to the disposal.

Homework Answers

Answer #1

Hi

Let me know in case you face any issue:

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
(A) On 1 January 2017, Kidal Limited purchased a machine at a cost of $350,000 by...
(A) On 1 January 2017, Kidal Limited purchased a machine at a cost of $350,000 by signing a note payable of $300,000. The remaining $50,000 was paid by cash. The useful life of the machine was estimated to be 5 years with a residual value of $50,000. The machine was expected to produce 200,000 units of products over its 5-year useful life. For the years 2017 and 2018, the machine had produced 50,000 units and 80,000 units of products respectively....
Patel Limited sells equipment on September 30, 2020 for $84,000.  The equipment originally cost $288,000 when purchased...
Patel Limited sells equipment on September 30, 2020 for $84,000.  The equipment originally cost $288,000 when purchased on January 1, 2018.  It has an estimated residual value of $40,000 and a useful life of five years.  Depreciation was last recorded on December 31, 2019, the company’s year end. Prepare the journal entries to: 1) update depreciation using the straight line method to September 30, 2020 2) record the sale of the equipment
Steagall Corporation purchased a vehicle costing $65,000 on January 1, 2019. The company intends to depreciate...
Steagall Corporation purchased a vehicle costing $65,000 on January 1, 2019. The company intends to depreciate the asset over 4 years using the units-of-activity method, based on mileage. The salvage value is estimated to be $3,000. The vehicle is expected to be driven by Steagall a total of approximately 200,000 miles during the life of the asset. Using this information, answer the following questions. What is the depreciation rate of vehicle? $____________________ Prepare the necessary journal entry to record depreciation...
Pharoah Company sells equipment on March 31, 2021, for $33,740 cash. The equipment was purchased on...
Pharoah Company sells equipment on March 31, 2021, for $33,740 cash. The equipment was purchased on January 5, 2018, at a cost of $82,500, and had an estimated useful life of five years and a residual value of $2,600. Pharoah Company uses straight-line depreciation for equipment. Adjusting journal entries are made annually at the company’s year end, December 31. 1. Prepare the journal entry to update depreciation to March 31, 2021. 2. Prepare the journal entry to record the sale...
Highsmith Rental Company purchased an apartment building early in 2018. There are 15 apartments in the...
Highsmith Rental Company purchased an apartment building early in 2018. There are 15 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 25,000 $ 4,000 6 Refrigerators 20,000 6,000 5 Dishwashers 18,000 5,000 4 In 2021, four new refrigerators costing $3,200 were purchased for cash. The old refrigerators, which...
Highsmith Rental Company purchased an apartment building early in 2018. There are 15 apartments in the...
Highsmith Rental Company purchased an apartment building early in 2018. There are 15 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 35,000 $ 5,000 6 Refrigerators 30,000 2,000 5 Dishwashers 28,000 1,000 4 In 2021, two new refrigerators costing $3,700 were purchased for cash. The old refrigerators, which...
Highsmith Rental Company purchased an apartment building early in 2021. There are 20 apartments in the...
Highsmith Rental Company purchased an apartment building early in 2021. There are 20 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available: Appliance Cost Residual Value Service Life (in Years) Stoves $ 23,000 $ 5,000 6 Refrigerators 18,000 5,000 5 Dishwashers 16,000 4,000 4 In 2024, five new refrigerators costing $3,100 were purchased for cash. In that same year,...
Sofie’s Soda Co purchased a soda drink machine on January 1st, 2016 for $600,000. The company...
Sofie’s Soda Co purchased a soda drink machine on January 1st, 2016 for $600,000. The company provided the following additional information: Expected useful life is 10 years or 100,000 drinks. In 2016, 6,000 drinks were sold. In 2017, 16,000 drinks were sold. Residual value $20,000. In 2018, 12,000 bottles were sold. The company also provided the following information using three (3) deprecation methods at the end of 2016 and 2017: Method A Year Annual Depreciation Expense Accumulated Depreciation 2016 $         ...
Part a: Nixon Ltd holds 55 per cent of the voting rights of Lumix Ltd. Harvey...
Part a: Nixon Ltd holds 55 per cent of the voting rights of Lumix Ltd. Harvey Ltd has 40 per cent of the voting rights of Lumix Ltd as well as an option to acquire half of Nixon's voting rights. The option is exercisable for the next two years at a fixed price that is out of the money but not too much (and is expected to remain so for that two-year period). Nixon has been exercising its votes and...
Meerbeck Ltd purchased equipment on 1 July 2015 for $39 800 cash. Transport and installation costs...
Meerbeck Ltd purchased equipment on 1 July 2015 for $39 800 cash. Transport and installation costs of $4 200 were paid on 5 July 2015. Useful life and residual value were estimated to be 10 years and $1800 respectively. Meerbeck Ltd depreciates equipment using the straight-line method to the nearest month, and reports annually on 30 June. The company tax rate is 30%.     In June 2017, changes in technology caused the company to revise the estimated total life from...