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

[($80,000 - $5,000)/10 years] = $7,500 depreciation per year. After four years, the book value would be [$80,000 - ($7,500 x 4 years)] = $50,000. The asset was sold for $52,000 or a $2,000 gain over book value.

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