Answer:
Reese Company Journal entries
September 30, 2017
Dr Depreciation Expense 12,000
Cr Accumulated Depreciation -Equipment 12,000
(To record depreciation expense)
Dr Cash 46,000
Dr Accumulated Depreciation-Equipment 44,000
Dr Loss on Disposal of Plant Assets 6,000
Cr Equipment 96,000
(To record sale of delivery equipment at a loss)
b)On June 30, 2017
Dr Cash 24,000
Dr Accumulated Depreciation-Equipment 15,000
Cr Equipment 36,000
Cr Gain on Disposal of Plant Assets 3,000
(To record sale of office equipment at a gain)
Explanation:
a.September 30, 2017
Calculation for Depreciation Expense and Accumulated Depreciation -Equipment
We have to record depreciation expense for the first 9 months of 2017 which is
$80,000 ÷ 5 years = $16,000 ×9/12 = $12,000
Calculation for Accumulated Depreciation-Equipment:
($32,000 + $12,000) =44,000
Calculation for Loss on Disposal of Plant Assets
($52,000 – $46,000) =6,000
b)On June 30, 2017
Calculation for Gain on Disposal of Plant Assets
($24,000 – $21,000)=3,000
