Question

On January 1, 2015 Vasquez Manufacturing Company purchased a vehicle for $34,500. At the time of...

On January 1, 2015 Vasquez Manufacturing Company purchased a vehicle for $34,500. At the time of the purchase the vehicle had an estimated useful life of 6 years and a salvage value of $750. The vehicle was disposed of on December 1, 2019.

a. If Vasquez was using the straight-line method of depreciation, what was the book value of the vehicle at the time of disposal?

b. Write the journal entry to record the disposal of vehicle assuming it was sold for $5,000

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a. If Vasquez was using the straight-line method of depreciation, what was the book value of the vehicle at the time of disposal?

Vehicle purchase on January 1, 2015 & sold on Dec 1, 2019 i.e after 4 years & 11 months

Depreciation for 4 years & 11 month :

Depreciation per year = (Cost - Salvage) /Life

             = ($34500 - $750)/6 years = $5625

Dep for 4 years & 11 months = ($5625 * 4 years) + ($5625/12*11) = $27656

Book value at the time of disposal = $34500 - $27656 = $6844

b. Write the journal entry to record the disposal of vehicle assuming it was sold for $5,000

Accounts Title

Debit

Credit

Cash

$5000

Loss on sale of vehicle

$1844

Accumulated Depreciation-Vehicle

$27656

Vehicle

$34500
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Revision of Depreciation On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was...
Revision of Depreciation On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2019, Moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000. a. Prepare a journal entry to record depreciation expense on the equipment for 2019. Round...
Question A On January 1, 2015, Charmin Manufacturing Company purchased a machine for $220,000. The company...
Question A On January 1, 2015, Charmin Manufacturing Company purchased a machine for $220,000. The company expects to use the machine a total of 80,000 hours over the next 10 years. The estimated sales price of the machine at the end of 10 years is $10,000. The company used the machine 8,000 hours in 2015 and 12,000 in 2016. Requirements: Compute and show workings for the deprecation expense to be charged using the straight line, units of production and double-declining...
manna manufacturing purchased a machine on january 1, 2015 for $ 42,750. at the time of...
manna manufacturing purchased a machine on january 1, 2015 for $ 42,750. at the time of purchase. the machine was estimated to have a life of four years and a residual value of $7,750. on january 1, 2017, munna determined that the machine had a total useful life of seven years (another five years) and a residual value of $ 4500. if manna uses the straight line method of depreciation, what will be the depreciation expense for the machine in...
(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....
On January 1, 2018, Algo Company purchased a truck for $50,000. Salvage value is expected to...
On January 1, 2018, Algo Company purchased a truck for $50,000. Salvage value is expected to be $5,000. The truck's useful life is expected to be 5 year. The company uses the straight-line depreciation expense method to record depreciation. What is the truck's December 31, 2019 net book value after the recording of the 2019 depreciation expense?
Exercise 22-11 Pina Co. purchased a equipment on January 1, 2015, for $577,500. At that time,...
Exercise 22-11 Pina Co. purchased a equipment on January 1, 2015, for $577,500. At that time, it was estimated that the equipment would have a 10-year life and no salvage value. On December 31, 2018, the firm’s accountant found that the entry for depreciation expense had been omitted in 2016. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2018. At present, the company uses the sum-of-the-years’-digits method for...
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...
Teal Products purchased a machine on January 1, 2014, for $60,200 and estimated its useful life...
Teal Products purchased a machine on January 1, 2014, for $60,200 and estimated its useful life and salvage value at five years and $12,800, respectively. On January 1, 2017, the company added three years to the original useful-life estimate. (a) Compute the book value of the machine as of January 1, 2017, assuming that Teal uses the straight-line method of depreciation. (b) Prepare the journal entry entered by the company to record depreciation on December 31, 2017.
Reflex Corp purchased equipment on June 30, 2011 for $50,000. It had an estimated useful life...
Reflex Corp purchased equipment on June 30, 2011 for $50,000. It had an estimated useful life of 10 years and an estimated salvage value of $12,000. On January 1, 2019, it was sold for $24,000. Reflex uses the straight line method of depreciating its assets. The journal entry to record the disposal of this asset would include:
Annual depreciation expense on equipment purchased a few years ago (using the straight-line method) is $5,000....
Annual depreciation expense on equipment purchased a few years ago (using the straight-line method) is $5,000. The cost of the equipment was $100,000. The current book value of the equipment (January 1, 2021) is $85,000. At the time of purchase, the asset was estimated to have a zero salvage value. On January 1, 2021, the company decided to reduce the original useful life by 25% and to establish a salvage value of $5,000. The firm also decided double-declining-balance depreciation was...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT