On June 1, Aаrоn Cоmpаny purchаsed equipment at a cоst of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Aaron’s fiscal year ends on December 31. Using straight-line depreciation, compute the depreciation expense for the final (partial) year of service.
Equipment аcquired оn Jаnuаry 2, Year 1, at a cоst оf $525,000 has an estimated useful life of 8 years and an estimated residual value of $45,000. Answer the following questions; (a) What is the annual amount of depreciation for the first 3 years, assuming the straight-line method of depreciation is used? (b) What is the book value of the equipment on January 1, Year 4? (c) Assuming that the equipment is sold on January 2, Year 4, for $326,000, journalize the entry for the sale. (d) Assuming that the equipment is sold on January 2, Year 4, for $394,000, journalize the entry for the sale Chart of Accounts (partial) Asset Accounts: Cash, Supplies, Insurance, Equipment, Accumulated Depreciation-Equipment, Building, Accumulated Depreciation-Building, Land Liability Accounts: Accounts Payable, Notes Payable, Mortgage Payable, Bonds Payable Shareholder's Equity Accounts: Common Stock, Additional Paid‑In Capital, Retained Earnings, Treasury Stock, Sales Revenue, Interest Revenue, Gain on Sale of Equipment, Gain on Sale of Building, Loss on Sale of Equipment, Loss on Sale of Building, Depreciation Expense-Equipment, Depreciation Expense-Building, Interest Expense Provide solutions below by following directions exactly as stated to earn credit for each question (a through d). When entering numbers, enter amounts only. You may use separators such as comma's. Do not use dollar sings. Here is an example: 541,200 OR 541200 (a): Annual Amount [answerA] (b): Book Value [answerB] For letters (c and d); enter all debit accounts first then all credit accounts (the order in which you should enter the accounts are based on the order they appear in the chart of accounts ABOVE). For example, if a compound entry were to be entered for the acquisition of land for $100,000; paying $20K in cash and the remainder as a loan, the entry would be prepared as such so the system can register it as correct: Land, 100,000 (this is the only debit account so it would be entered first as a debit) Cash, 20,000 ("Cash" is listed first as it appears first under the chart of accounts, entered first as a credit) Notes Payable, 80,000 ("Loans Payable" appears second as it is listed after "Cash" under the chart of accounts, entered second as a credit) (c): Journal entry. If a cell doesn't require an entry, enter a single ZERO. Debit Credit [DR1] [DRAMT1] [0a] [DR2] [DRAMT2] [00] [DR3] [DRAMT3] [000] [CR1] [0000] [CRAMT1] (d): Journal entry. If a cell doesn't require an entry, enter a single ZERO. Debit Credit [DR4] [DRAMT4] [00000] [DR5] [DRAMT5] [000000] [CR2] [0000000] [CRAMT2] [CR3] [00000000] [CRAMT3]