On January 1, 2015, Miller Company purchased equipment for $16,000. Miller uses straight-line depreciation and estimates a five-year useful life and a $1,000 salvage value. On December 31, 2019, the equipment was stolen.
Assuming the equipment was not insured against theft, the journal entry to record the theft should reflect:

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The cost of the equipment is $16,000 with a salvage value of $1,000, resulting in a depreciable base of $15,000. Over a 5-year life, annual depreciation is $3,000 ($15,000 / 5 years). By the end of 2019 (5 years), the equipment is fully depreciated. The book value at the time of theft is the salvage value, $1,000. Since the equipment was stolen and not recovered, the company writes off the remaining book value, resulting in a $1,000 loss.

On January 1, 2015, Miller Company Purchased Equipment for $16,000