Career Services,Incorporated sold some office equipment for $52,000 on December 31,2012.The journal entry to record the sale would include which of the following if the original cost of the equipment was $80,000 with a residual value of $5,000 and a useful life of 10 years? Assume the machine was purchased on January 1,2009 and depreciated using the straight-line method.

Question

Quizplus · Accepted Answer

The equipment was depreciated for 4 years (2009-2012), with annual depreciation of ($80,000 - $5,000) / 10 = $7,500. Accumulated depreciation is 4 * $7,500 = $30,000. The book value at sale is $80,000 - $30,000 = $50,000. The sale price is $52,000, resulting in a gain of $2,000 ($52,000 - $50,000).

Career Services,Incorporated Sold Some Office Equipment for $52,000 on December