Equipment was acquired at the beginning of the year at a cost of $465,000. The equipment was depreciated using the straight-line method based on an estimated useful life of 15 years and an estimated residual value of $45,000.
a. What was the depreciation for the first year?
$
b. Assuming the equipment was sold at the end of the eighth year for $235,000, determine the gain or loss on the sale of the equipment.
$
Loss
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c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

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rani01654 rani01654 · Answer 1 · 2020-01-13T13:46:19+01:00

Answer:

a. The value depreciation for the first year is $28000.

b. There will be a loss of sale of the equipment by $6000.

Step-by-step explanation:

Equipment was purchased at the beginning at a cost of $465,000.

Now, the price of the equipment depreciates in a linear manner i.e. depreciates equally every year.

The price of the equipment is depreciated to $45000 after 15 years of its estimated useful life.

So, the per year depreciation of value of the equipment will be [tex]\frac{465000 - 45000}{15} = 28000[/tex] dollars per year.

a. The value depreciation for the first year is $28000. (Answer)

b. The depreciated value of the equipment after 8 years will be $[465000 - (28000 × 8)] = $241000.

If the equipment was sold for $235000 at the end of the eighth year, then there will be a loss by $(241000 - 235000) = $6000. (Answer)