1. Allowance for Uncollectible Accounts2. Copyrights3. Land4. Merchandise Inventory5. Amortization6. Petty Cash7. Accumulated Depreciation-Equipment8. Office Equipment9. Accounts Payable10. Buildings11. Delivery Equipment12. Patents13. Income Summary14. Transportation In15. Supplies16. Prepaid InsuranceGroup 2Consider the following information about a plant asset for questions 19 , and write the correct amounts on your answer sheet. The comp calendar year end.\begin{tabular}{|l|r|}\hline Original Cost & $75,000 \\\hline Disposal Value & $6,000 \\\hline Date Purchased & 01−01−15 \\\hline Estimated Useful Life & 5 years \\\hline Depreciation Method & ? \\\hline Accumulated Depreciation as of 12−31−17 & 58,800 \\\hline Asset Sold Date & 12−31−18 \\\hline Asset Sold for & $10,000 \\\hline\end{tabular}17. What is the amount of depreciation expense for the year 2018?8. What is the amount of gain or loss on the sale of the asset?9. For this question only, consider that the asset was not sold. What is th amount of depreciation expense for the year 2019 ?
Q. 1. Allowance for Uncollectible Accounts2. Copyrights3. Land4. Merchandise Inventory5. Amortization6. Petty Cash7. Accumulated Depreciation-Equipment8. Office Equipment9. Accounts Payable10. Buildings11. Delivery Equipment12. Patents13. Income Summary14. Transportation In15. Supplies16. Prepaid InsuranceGroup 2Consider the following information about a plant asset for questions 19 , and write the correct amounts on your answer sheet. The comp calendar year end.\begin{tabular}{|l|r|}\hline Original Cost & $75,000 \\\hline Disposal Value & $6,000 \\\hline Date Purchased & 01−01−15 \\\hline Estimated Useful Life & 5 years \\\hline Depreciation Method & ? \\\hline Accumulated Depreciation as of 12−31−17 & 58,800 \\\hline Asset Sold Date & 12−31−18 \\\hline Asset Sold for & $10,000 \\\hline\end{tabular}17. What is the amount of depreciation expense for the year 2018?8. What is the amount of gain or loss on the sale of the asset?9. For this question only, consider that the asset was not sold. What is th amount of depreciation expense for the year 2019 ?
Calculate Depreciation Expense: Calculate the annual depreciation expense using the straight-line method.Annual Depreciation Expense = (Original Cost−Disposal Value)/Estimated Useful Life= ($75,000−$6,000)/5 years= $69,000/5= $13,800 per year
Determine Accumulated Depreciation: Determine the accumulated depreciation as of 12−31−18. Accumulated Depreciation on 12−31−17 is $58,800. Add the annual depreciation expense for 2018 to the accumulated depreciation. Accumulated Depreciation on 12−31−18 = $58,800+$13,800=$72,600
Calculate Book Value: Calculate the book value of the asset as of 12−31−18.Book Value = Original Cost - Accumulated Depreciation= \$\(75,000 - \$\(72\),\(600\)\(\newline\)= \$\(2\),\(400\)
Determine Gain or Loss: Determine the gain or loss on the sale of the asset.\(\newline\)Asset Sold for \(\$10,000\).\(\newline\)Gain/Loss = Sale Price - Book Value\(\newline\)= \(\$10,000\) - \(\$2,400\)\(\newline\)= \(\$7,600\)\(\newline\)Since the sale price is higher than the book value, it's a gain.
Calculate Depreciation Expense for \(2019\): For the year \(2019\), calculate the depreciation expense assuming the asset was not sold.\(\newline\)Since the asset has already been fully depreciated by the end of \(2018\) (Accumulated Depreciation is equal to the depreciable amount), there is no depreciation expense for \(2019\).\(\newline\)Depreciation Expense for \(2019\) = \(\$0\)
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