Answer:
Accounts Assets Liabilities Net income
a. Depreciation Expense -$200 -$200
b. Land / Cash -$9,000 + $12,000 + $3,000
c. Equipment/Lease Liability +$11,000 +$11,000
d. Cash /Lease Liability -$2,500 -$2,500
e. Cash /Trademark -$6,600 + $6,600
Amortization Expense -$165
f. & g. Cash /Equipment +$16,000 -$19,300 -$3,300
Explanation:
b. The land was sold with a gain of $3,000 ($12,000 - 9,000)
e. The trademark's amortization expense = $6,600/40 = $165 per year.
f and g. The Accounts involved are:
1. Cash +$16,000 for the sale.
2. Equipment has a debit balance of $44,000 and a credit balance of $23,400 plus Depreciation expense of $1,300. These give a net balance of $19,300. The equipment was sold for $16,000, recording a loss of $3,300.
3. Loss from sale of equipment = $3,300 as determined above.
