Question

Entries for Sale of Fixed Asset Equipment acquired on January 8 at a cost of $105,310, has an estimated useful life of 12 years, has an estimated residual value of $7,150, and is depreciated by the straight-line method. a. What was the book value of the equipment at December 31 the end of the fourth year? $ 72,590 b. Assuming that the equipment was sold on April 1 of the fifth year for 63,680. 1. Journalize the entry to record depreciation for the three months until the sale date. Round your answers to the nerest whole dollar if required. 2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations.

Answer 1

a) Book value at the end of fourth year = Assets-Accumlated depreciation

= 105310-(105310-7150/12*4)

Book value at the end of fourth year = 72590

b) Journal entry :

Date	account & explanation	debit	credit
Apr 1	Depreciation expense (105310-7150/12)*3/12	2045
	Accumlated depreciation		2045
	(To record depreciation expense)
Apr 1	Accumlated depreciation	34765
	Cash	63680
	Loss on sale of equipment	6865
	Equipment		105310
	(To record sale of equipment)