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Question
(a) Faster Company purchased equipment in 2005 for $92,000 and estimated an $8,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2011, there was $58,800 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2012, the equipment was sold for $21,000.
Prepare the appropriate journal entries to remove the equipment from the books of Faster Company on March 31, 2012.
(b) Lewis Company sold equipment for $11,000. The equipment originally cost $25,000 in 2009 and $6,000 was spent on a major overhaul in 2012 (charged to the Equipment account). Accumulated Depreciation on the equipment to the date of disposal was $20,000.
Prepare the appropriate journal entry to record the disposition of the equipment.
(c) Selby Company sold equipment that had a book value of $4,500 for $5,000. The equipment originally cost $15,000 and it is estimated that it would cost $19,000 to replace the equipment.
Prepare the appropriate journal entry to record the disposition of the equipment.
Answer
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