Questions -
Q1. A company sells a fixed asset (equipment) for $30,000. The asset originally cost $80,000 and had accumulated depreciation of $55,000 at the time of the sale. Record the journal entry to recognize the sale.
Q2. A company scraps a fully depreciated piece of equipment originally costing $20,000. They did not receive any proceeds. Record the journal entry.
Q3. A company sells a piece of plant equipment for $2,000. The original cost was $10,000 and the accumulated depreciation through the date of the sale was $6,500. Record the journal entry.
Q4. A company trades in a truck for a new one. The old truck had an original cost of $20,000 and accumulated depreciation of $14,000. The new truck had a sticker price on the window of $25,000. The dealer gave a $7,500 trade in allowance and the company wrote a check to the dealer for $15,750. Record the journal entry.
Q5. Define depletion (10 points)
Q6. A company sells 200,000 shares of newly issued common stock having a par value of $1 for $8.50 per share. Record the journal entry.
Q7. A company has net income of $4,580,000. There are 200,000 shares of $50 par, 6% preferred stock outstanding and 800,000 shares of common stock. What is the net income per common share (earnings per share). Show your calculation.