90.2K

Verified Solution

Link Copied!

Alaska Company purchased a computer to use in their business on January 1, 2014 at a cost of $10,000. The computer's estimated useful life was 5 years, and the residual value is $400. Alaska Company deprec

Exercise 10.4 Alaska Company purchased a computer to use in their business on January 1, 2014 at a cost of $10,000. The computer's estimated useful life was 5 years, and the residual value is $400. Alaska Company depreciates all its assets using the straight-line method.

Requirements Assuming that the computer is disposed of on June 1, 2016, prepare the journal entry to record the partial year's depreciation, and prepare T-Accounts listing the account balances for Alaska Company account and its related Accumulated Depreciation account at June 1, 2016. Prepare the journal entry required at June 1, 2016 to record the sale or disposal of the computer under each of the following independent assumptions:

(1) The computer is sold for $6,000.

(2) The computer is sold for $4,000.

(3) The computer is discarded (junked or thrown away).

(4) The computer is traded-in on a new, similar computer with a cost of $15,000. A trade-in allowance of $4,800 was given on the old computer.

Exercise 10.4 Alaska Company purchased a computer to use in their business on January 1, 2014 at a cost of $10,000. The computer's estimated useful life was 5 years, and the residual value is $400. Alaska Company depreciates all its assets using the straight-line method. Requirements Assuming that the computer is disposed of on June 1, 2016, prepare the journal entry to record the partial year's depreciation, and prepare T-Accounts listing the account balances for Alaska Company account and its related Accumulated Depreciation account at June 1, 2016. Prepare the journal entry required at June 1, 2016 to record the sale or disposal of the computer under each of the following independent assumptions: (1) The computer is sold for $6,000. (2) The computer is sold for $4,000. (3) The computer is discarded (junked or thrown away). (4) The computer is traded-in on a new, similar computer with a cost of $15,000. A trade-in allowance of $4,800 was given on the old computer

Answer & Explanation Solved by verified expert

See Answer