ACC557 Week 6 Chapter 9 E9 9 E9 11 E9 12 P9 3A

Question: #8274

EXERCISE 9-9

Jan. 1 Accumulated Depreciation—Equipment.......... 58,000

Equipment.................................................................. 58,000

June 30 Depreciation Expense.......................................... 4,000

Accumulated Depreciation—Equipment

($40,000 X 1/5 X 6/12)........................................... 4,000

30 Cash......................................................................... 14,000

Accumulated Depreciation—Equipment

($40,000 X 3/5 = $24,000; $24,000 + $4,000)..... 28,000

Gain on Disposal of Plant Assets

[$14,000 – ($40,000 – $28,000)].......................... 2,000

Equipment.................................................................. 40,000

Dec. 31 Depreciation Expense.......................................... 5,000

Accumulated Depreciation—Equipment

[($33,000 – $3,000) X 1/6]..................................... 5,000

31 Loss on Disposal of Plant Assets...................... 8,000

Accumulated Depreciation—Equipment

[($33,000 – $3,000) X 5/6]................................. 25,000

Equipment.................................................................. 33,000

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Exercise 9-9

Your answer is correct.

Presented below are selected transactions at Tomas Company for 2014.

Jan. 1

Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $58,000 on that date. It had a useful life of 10 years with no salvage value.

June 30

Sold a computer that was purchased on January 1, 2011. The computer cost $40,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.

Dec. 31

Discarded a delivery truck that was purchased on January 1, 2010. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Tomas Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2013.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1

June. 30

(To record current depreciation)

June. 30

(To record the sale of the Asset)

Dec. 31

(To record current depreciation)

Dec. 31

(To record the disposal of the truck)

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Solution: #8275

ACC557 Week 6 Chapter 9 (E9-9 E9-11 E9-12 P9-3A)

EXERCISE 9-9 Jan. 1 Accumulated Depreciation—Equipment 58,000 Equipment 58,000 June 30 Depreciation Expense 4,000 Accumulated Depreciation—Equipment ($40,000 X 1/5 X 6/12) 4,000 30 Cash 14,000 Accumulated Depreciation—Equipment ($40,000 X 3/5 = $24,000; $24,000 + $4,000) 28,000 Gain on Disposal of Plant Assets [$14,000 – ($40,000 – $28,000)] 2,000 Equipment 40,000 Dec. 31 Depreciation Expense 5,000 Accumulated Depreciation—Equipment [($33,000 –...