Reference no: EM132485962

Point 1: Depreciation by Two Methods; Sale of Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.Fixed Asset

Point 2: New printing equipment, acquired at a cost of $110,000 on September 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of four years and an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $7,500. The supervisor requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the supervisor, the double-declining-balance method was selected.

Point 3: On September 6 of Year 4, the equipment was sold for $18,000.

Required:

Question 1. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the The cost of a fixed asset minus accumulated depreciation on the asset.book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method.

a. A method of depreciation that provides for equal periodic depreciation expense over the estimated life of a fixed asset.Straight-line method

b. A method of depreciation that provides periodic depreciation expense based on the declining book value of a fixed asset over its estimated life.Double-declining-balance method

Question 2. Journalize the entry to record the sale, assuming double-declining balance method is used. If an amount box does not require an entry, leave it blank.

Question 3. Journalize the entry to record the sale in (2), assuming that the equipment sold for $10,500 instead of $18,000. If an amount box does not require an entry, leave it blank.