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

Exercise 55

A Sale of equipment
Equipment was acquired at the beginning of the year at a cost of $465,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 15 years and an estimated residual value of $45,000.
a. What was the depreciation for the first year
b. Assuming the equipment was sold at the end of the eighth year for $235,000, determine the gain or loss on the sale of the equipment.
c. Journalize the entry to record the sale.
B Sale of equipment
Equipment was acquired at the beginning of the year at a cost of $600,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 16 years and an estimated residual value of $60,000.
a. What was the depreciation for the first year
b. Assuming the equipment was sold at the end of the second year for $480,000, determine the gain or loss on the sale of the equipment.
c. Journalize the entry to record the sale.