Equipment acquired on January 1, 2010, is sold on June 30, 2013, for $11,200. The equipment cost $26,800, had an estimated residual value of $6,800, and an estimated useful life of 5 years. The company prepared financial statements on December 31, and the equipment has been depreciated using the straight-line method. Prior to determining the gain or loss on the sale of this equipment, the company should record depreciation of:

Question

Quizplus · Accepted Answer

The annual depreciation is ($26,800 - $6,800) / 5 = $4,000. For half a year (January 1 to June 30, 2013), the depreciation is $4,000 / 2 = $2,000.

Equipment Acquired on January 1, 2010, Is Sold on June