New lithographic equipment, acquired at a cost of $950,400 on March 1 of Year 1...
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Accounting
New lithographic equipment, acquired at a cost of $950,400 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $106,920. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.
On March 4 of Year 5, the equipment was sold for $154,682.
Required:
1.
Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. Round your answers to the nearest whole dollar.
2.
Journalize the entry to record the sale assuming that the manager chose the double-declining-balance method.*
3.
Journalize the entry to record the sale in (2) assuming that the equipment was sold for $108,792 instead of $154,682.*
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
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