Answer:
Dr. Cash $124,200
Dr. Accumulated Depreciation $118,800
Dr. Loss on Disposal $16,200
Cr. Equipment $259,200
Explanation:
Depreciation is the recording of asset expense due to its use. It is due to use of fair value of the asset after use. The expense value reduces the asset value over useful life period.
As per given data
Cost of Asset = $259,200
Useful life= 5 years
Salvage Value = $43,200
Asset is purchased on January 1, 2020 and on September 30, 2022 depreciation of only 2 years and 9 months has charged.
Depreciation per year = (Cost of Asset - Salvage Value) / Useful life = ($259,200 - $43,200) / 5 = $43,200
Accumulated Depreciation as on September 30, 2022 = ($43,200 x 2) + $43,200 x 9/12 = $118,800
Book value of the asset is the net of accumulated depreciation of the asset. The accumulated depreciation on September 30, 2022, is as follow:
Net Book value of Asset = 259,200 - $118,800 = $140,400
