Faster Company purchased equipment in 2010 for $104,000 andestimated an $8,000 salvage value at...

70.2K

Verified Solution

Question

Accounting

Faster Company purchased equipment in 2010 for $104,000 andestimated an $8,000 salvage value at the end of the equipment's10-year useful life. At December 31, 2016, there was $67,200 in theAccumulated Depreciation account for this equipment using thestraight-line method of depreciation. On March 31, 2017, theequipment was sold for $21,000.
         Preparethe appropriate journal entries to remove the equipment from thebooks of Faster Company on March 31, 2017.
(b)    Lewis Company sold equipment for $11,000.The equipment originally cost $25,000 in 2014 and $6,000 was spenton a major overhaul in 2017 (charged to the Equipment account).Accumulated Depreciation on the equipment to the date of disposalwas $20,000.
         Preparethe appropriate journal entry to record the disposition of theequipment.
(c)    Selby Company sold equipment that had abook value of $13,500 for $15,000. The equipment originally cost$45,000 and it is estimated that it would cost $57,000 to replacethe equipment.
         Preparethe appropriate journal entry to record the disposition of theequipment.

Answer & Explanation Solved by verified expert

3.8 Ratings (593 Votes)

Q1 Depreciation expense should be calculated first Depreciation expense for each year Purchase cost Salvage value Life years 104000 8000 10 96000 9600 Accumulated depreciation is for 7 years since the year 2010 to 2016 is a gap of 7 years Accumulated See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingFaster Company purchased equipment in 2010 for $104,000 andestimated an $8,000 salvage value at the...Faster Company purchased equipment in 2010 for $104,000 andestimated an $8,000 salvage value at the end of the equipment's10-year useful life. At December 31, 2016, there was $67,200 in theAccumulated Depreciation account for this equipment using thestraight-line method of depreciation. On March 31, 2017, theequipment was sold for $21,000. Preparethe appropriate journal entries to remove the equipment from thebooks of Faster Company on March 31, 2017.(b) Lewis Company sold equipment for $11,000.The equipment originally cost $25,000 in 2014 and $6,000 was spenton a major overhaul in 2017 (charged to the Equipment account).Accumulated Depreciation on the equipment to the date of disposalwas $20,000. Preparethe appropriate journal entry to record the disposition of theequipment.(c) Selby Company sold equipment that had abook value of $13,500 for $15,000. The equipment originally cost$45,000 and it is estimated that it would cost $57,000 to replacethe equipment. Preparethe appropriate journal entry to record the disposition of theequipment.