Straight-line depreciation method

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Reference no: EM131202279

Gidley Inc. purchased a piece of equipment on January 1,2014. The following information is available for this purchase: Purchase Price - $950,000 Transportation - $100,000 Installation - $130,00 Salvage Value - $50,000 Useful Life - 4 years Included in the transporatation cost is $1,000 for insurance covering the shipment of the equipment to Gidley. Included in the cost of installation is $80,000 in wages paid to employees who helped install the eqipment. A. Compute the cost of the fixed asset that should be capitalized. B. Prepare the entry to reord depreciation expense for the year ended December 31, 2014, assuming the company uses each of the following (1) Double-decling-balance depreciation method (2) Straight line depreciation method C. Assuming that the eqipment was sold January 1, 2015, for $250,00, prepare the entry to record the sale of the equipment using each of the following methods (1) Double-decling-balance depreciation method (2) Straight-line depreciation method.

Reference no: EM131202279

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