Reference no: EM131260917
Asset Disposal
Assume that Gonzalez Company purchased an asset on January 1, 2014, for $53,200. The asset had an estimated life of six years and an estimated residual value of $5,320. The company used the straight-line method to depreciate the asset. On July 1, 2016, the asset was sold for $35,610.
Required:
1. Make the journal entry to record depreciation for 2016. How does this entry affect the accounting equation?
Indicate the effect on financial statement items by selecting "–" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.
Journal Balance Sheet Income Statement
Stockholders’ Net
Date Description Debit Credit Assets = Liabilities + Equity Revenues – Expenses = Income
July 1
Record the sale of the asset. How does this entry affect the accounting equation?
Indicate the effect on financial statement items by selecting "–" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.
Journal Balance Sheet Income Statement
Stockholders’ Net
Date Description Debit Credit Assets = Liabilities + Equity Revenues – Expenses = Income
July 1
2. How should the gain or loss on the sale of the asset be presented on the income statement?
The gain or loss should appear in the of the income statement to indicate that it part of the normal operating activity of the company.
Present break-even point in unit sales and in dollar sales
: Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. What is the present ye..
|
Amortization of intangibles
: Amortization of Intangibles. For each of the following intangible assets, indicate the amount of amortization expense that should be recorded for the year 2016 and the amount of accumulated amortization on the balance sheet as of December 31, 2016.
|
Completion for project and variance for each cost cost code
: A contractor has a contract to remove and replace the existing landscape and sidewalks around an office build- ing. The work includes demolition of the existing land- scaping and sidewalks, importing fill and grading around the office building, const..
|
Introduction to governmental and not for profit accounting
: What are the proper journal entries to the following question: The city reduces tax bills by $60,000 based on taxpayer appeals of property value assessments, and taxpayers deduct $30,000 in discounts for early payment of bills. As a result, the city'..
|
Asset disposal-entry affect the accounting equation
: Assume that Gonzalez Company purchased an asset on January 1, 2014, for $53,200. The asset had an estimated life of six years and an estimated residual value of $5,320. The company used the straight-line method to depreciate the asset. On July 1, 201..
|
Straight-line and units-of-production methods
: Straight-Line and Units-of-Production Methods. Assume that Sample Company purchased factory equipment on January 1, 2016, for $60,000. The equipment has an estimated life of five years and an estimated residual value of $6,000. Calculate the deprecia..
|
Universal rule for achieving internal control over cash
: Properly designed internal control will permit the same employee to: Which of the following is not a universal rule for achieving internal control over cash? Which of the following is not a control that generally is established over cash receipts?
|
What is the amount of the annual deposit
: You want to have $75,000 in your savings account 12 years form now, and you've prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.8 percent interest, what amount must you deposit each year? What is ..
|
Compute the unit product cost for one barbecue grill
: Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $210. Data for last year’s operations follow: Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill..
|