Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 12

Disposal of fixed asset
Equipment acquired on January 6, 2013, at a cost of $425,000, has an estimated useful life of 16 years and an estimated residual value of $65,000
a. What was the annual amount of depreciation for the years 2013, 2014, and 2015 using the straight-line method of depreciation
b. What was the book value of the equipment on January 1, 2016
c. Assuming that the equipment was sold on January 3, 2016, for $340,000, journalize the entry to record the sale.
d. Assuming that the equipment had been sold on January 3, 2016, for $372,500 instead of $340,000, journalize the entry to record the sale.