"Plant Assets"
Shown below are the T-accounts relating to equipment that was purchased for cash by a company on the first day of the current year. The equipment was depreciated on a straight-line basis with an estimated useful life of 10 years and a salvage value of $100. Part of the equipment was sold on the last day of the current year for cash proceeds.
Cash EquipmentAccumulated Depreciation-Equipment
Jan.1 (a) Jan. 1 1,100 Dec. 31 100
Dec.31 450 Dec. 31 440 Dec 31 40 31 55
Depreciation ExpenseGain on Disposal of Plant Assets
Dec. 31 (b) Dec. 31 (c)
Instructions
Prepare the journal entries to record the following and derive the missing amounts:
(a) Purchase of equipment on January 1. What was the cash paid?
(b) Depreciation recorded on December 31. What was the depreciation expense?
(c) Sale of part of the equipment on December 31. What was the gain on disposal?
Attachment:- Finance_Discuss.rar