On January 1, 2007, Holloway Enterprises purchased an air compressor for $50,000. The compressor has an estimated salvage value of $5,000 and an estimated useful life of 5 years. Holloway uses the straight-line method to depreciate its assets.
Required:
1. Assume that Holloway sells the air compressor for $30,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.
2. Assume that Holloway sells the air compressor for $10,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.

Question

On January 1, 2007, Holloway Enterprises purchased an air compressor for $50,000. The compressor has an estimated salvage value of $5,000 and an estimated useful life of 5 years. Holloway uses the straight-line method to depreciate its assets.
Required:
1.	Assume that Holloway sells the air compressor for $30,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.
2.	Assume that Holloway sells the air compressor for $10,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.

Quizplus · Accepted Answer

The Answer of On January 1, 2007, Holloway Enterprises purchased an air compressor for $50,000. The compressor has an estimated salvage value of $5,000 and an estimated useful life of 5 years. Holloway uses the straight-line method to depreciate its assets.
Required:
1.	Assume that Holloway sells the air compressor for $30,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.
2.	Assume that Holloway sells the air compressor for $10,000 cash on March 31, 2010. Prepare all journal entries related to this asset's disposition.

On January 1, 2007, Holloway Enterprises Purchased an Air Compressor