Reference no: EM132726856

Question - The accountant for Becker Company wants to develop a balance sheet as of December 31, 2016. A review of the asset records has revealed the following information:

a. Asset A was purchased on July 1, 2014, for $30,000 and has been depreciated on the straight-line basis using an estimated life of six years and a residual value of $3,000.

b. Asset B was purchased on January 1, 2015, for $69,300. The straight-line method has been used for depreciation purposes. Originally, the estimated life of the asset was projected to be six years with a residual value of $6,300; however, at the beginning of 2016, the accountant learned that the remaining life of the asset was only three years with a residual value of $2,100.

c. Asset C was purchased on January 1, 2015, for $62,000. The double-declining-balance method has been used for depreciation purposes, with a four-year life and a residual value estimate of $5,000.

Required -

1. Assume that these assets represent pieces of equipment. Calculate the acquisition cost, accumulated depreciation, and book value of each asset as of December 31, 2016.

2. How would the assets appear on the balance sheet on December 31, 2016?

3. Assume that Becker Company sold Asset B on January 2, 2017, for $24,900. Calculate the amount of the resulting gain or loss and prepare the journal entry for the sale. Where would the gain or loss appear on the income statement?