Suppose the fed announced that it is lowering its target interest rate by 75 basis points, or 0.75%. to do this, the fed will us
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Answer:
Double declining
journal entry:
acc dep Equip 34,500 debit
cash 1,650 debit
loss on disposal 1,850 debit
equipment 38,000 credit
Explanation:
double declining rate:
2 /4 years of useful life = 0.5
Each year we multply the carrying value times the declining rate but last year, we adjust only to get the salvage value.
units of production
38,000 - 3,500 = 34500 amount subject dto depreciation
34,500 / 1,520,000 expected units-of-output = 0.022 rate per unit
we multiply the output by the activity level of each year
Sales gain or loss:
asunder both method is being sold at the end of the useful life it will be the same for each method
we compare the 3,500 ssalvage value against the 1,650 received and get a loss for 1,850
acc dep Equip 34,500 debit
cash 1,650 debit
loss on disposal 1,850 debit
equipment 38,000 credit