Answer:
depreciation expense 10,000 debit
acc dep office equipment 10,000 credit
<u>If sold at 40,000 dollars </u>
acc dep office equipment 130,000 debit
cash 60,000 debit
office equipment 170,000 credit
gain at disposal 20,000 credit
<u>If sold at 25,000 dollars </u>
acc dep office equipment 130,000 debit
cash 25,000 debit
loss at disposal 15,000 credit
office equipment 170,000 credit
Explanation:
depreciation expense using straight line method
(cost - salvage value) / useful life = depreciation expense
(170,000 - 10,000) / 8 = 20,000
half year depreciation: 20,000 x 1/2 = 10,000
book value:
170,000 - 6.5 year of depreciation
170,000 x 6.5 x 20,000 = 40,000
sales price: 60,000
gain = 20,000
if sold at 25,000 then:
25,000 - 40,000 0 -15,000 there will be a loss at disposal
