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The Black Company purchased equipment on June 1, 2020.  Assuming the cost of the equipment is $66,000,...

The Black Company purchased equipment on June 1, 2020.  Assuming the cost of the equipment is $66,000, the residual value is $6,000, a useful life of 5 years and the use of the straight line method. The company's year end is December 31.

1) What is depreciation expense at December 31, 2020?

2) What is accumulated depreciation at December 31, 2022?

3) What is the carrying value of the asset at December 31, 2023?

4) What is the carrying value of the asset at January 1, 2024?

5) What is depreciation expense at December 31, 2025?

You were asked to prepare the journal entry to record the sale of the above equipment on December 31, 2022.  

Is it a gain or loss if the equipment was sold for $30,000?

How much is the gain or loss?

Business   Accounting   
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Homework Answers

Answer #1

Answer 1

Depreciation expense at December 31, 2020- 7000

Answer 2

Accumulated depreciation at December 31, 2022- 31000

Answer 3

Carrying value of the asset at December 31, 2023- 23000

Answer 4

carrying value of the asset at January 1, 2024- 23000

Answer 5

depreciation expense at December 31, 2025- 5000

Journal Entry
Date Account Details Debit Credit
Dec 31 2022 Cash 30000
Accumulated Depreciation 31000
Loss on sale of asset 5000
To Equipment 66000
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