Ex. 250
Gurney Company sold equipment on July 31, 2011 for $75,000. The equipment had cost $210,000 and had $120,000 of accumulated depreciation as of January 1, 2011. Depreciation for the first 6 months of 2011 was $12,000.
Instructions
Prepare the journal entry to record the sale of the equipment.
Ex. 251
(a)Payne Company purchased equipment in 2004 for $90,000 and estimated a $6,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2009, there was $58,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2011, the equipment was sold for $24,000.
Prepare the appropriate journal entries to remove the equipment from the books of Payne Company on March 31, 2011.
Ex. 251(Cont.)
(b)Judson Company sold a machine for $15,000. The machine originally cost $35,000 in 2008 and $8,000 was spent on a major overhaul in 2011 (charged to Machine account). Accumulated Depreciation on the machine to the date of disposal was $28,000.
Prepare the appropriate journal entry to record the disposition of the machine.
(c)Donahue Company sold office equipment that had a book value of $6,000 for $8,000. The office equipment originally cost $20,000 and it is estimated that it would cost $25,000 to replace the office equipment.
Prepare the appropriate journal entry to record the disposition of the office equipment.
Ex. 252
Hanshew's Lumber Mill sold two machines in 2011. The following information pertains to the two machines:
PurchaseUsefulSalvageDepreciationSales
Machine Cost Date Life Value Method Date Sold Price
#1$88,0007/1/075 yrs.$8,000Straight-line7/1/11$20,000
#2$60,0007/1/105 yrs.$7,500Double-declining-12/31/11$36,000
balance
Instructions
(a)Compute the depreciation on each machine to the date of disposal.
(b)Prepare the journal entries in 2011 to record 2011 depreciation and the sale of each machine.
Ex. 253
Presented below are selected transactions for Corbin Company for 2011.
Jan.1Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2000. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value.
April30Sold a machine for $28,000 that was purchased on January 1, 2008. The machine cost $75,000, and had a useful life of 5 years with no salvage value.
Dec.31Discarded a business automobile that was purchased on April 1, 2007. The car cost $32,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.
Instructions
Journalize all entries required as a result of the above transactions. Corbin Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2010.
Ex. 254
Tidwell Company sold the following two machines in 2011:
Machine A Machine B
Cost$102,000$100,000
Purchase date7/1/071/1/08
Useful life8 years5 years
Salvage value$6,000$5,000
Depreciation methodStraight-lineDouble-declining-balance
Date sold7/1/118/1/11
Sales price$45,000$20,000
Instructions
Journalize all entries required to update depreciation and record the sales of the two assets in 2011. The company has recorded depreciation on the machine through December 31, 2010.