Computer equipment (office equipment) purchased 6 1/2 years ago
for $170,000, with an estimated life of 8 years and a residual
value of $10,000, is now sold for $60,000 cash. (Appropriate
entries for depreciation had been made for the first six years of
use.)
Required:
|
Journalize the following entries: |
| a. |
Record the depreciation for the one-half year prior to the
sale, using the straight-line method.* |
| b. |
Record the sale of the equipment.* |
| c. |
Assuming that the equipment had been sold for $25,000 cash,
prepare the entry to record the sale.* |
|
*Refer to the Chart of Accounts for exact wording of account
titles. |
CHART OF ACCOUNTSGeneral Ledger
|
ASSETS |
| 110 |
Cash |
| 111 |
Petty Cash |
| 112 |
Accounts Receivable |
| 114 |
Interest Receivable |
| 115 |
Notes Receivable |
| 116 |
Inventory |
| 117 |
Supplies |
| 119 |
Prepaid Insurance |
| 120 |
Land |
| 121 |
Office Equipment |
| 122 |
Accumulated Depreciation-Office Equipment |
| 132 |
Goodwill |
| 133 |
Patents |
|
LIABILITIES |
| 210 |
Accounts Payable |
| 211 |
Salaries Payable |
| 213 |
Sales Tax Payable |
| 214 |
Interest Payable |
| 215 |
Notes Payable |
|
EQUITY |
| 310 |
Common Stock |
| 311 |
Retained Earnings |
| 312 |
Dividends |
|
REVENUE |
| 410 |
Sales |
| 610 |
Interest Revenue |
| 620 |
Gain on Sale of Equipment |
|
EXPENSES |
| 510 |
Cost of Goods Sold |
| 520 |
Salaries Expense |
| 521 |
Advertising Expense |
| 522 |
Supplies Expense |
| 523 |
Delivery Expense |
| 524 |
Rent Expense |
| 525 |
Insurance Expense |
| 531 |
Repairs and Maintenance Expense |
| 541 |
Depreciation Expense-Office Equipment |
| 543 |
Depletion Expense |
| 544 |
Amortization Expense-Patents |
| 591 |
Miscellaneous Expense |
| 710 |
Interest Expense |
| 720 |
Loss on Sale of Equipment |