Question

The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained the following:

Property, plant, and equipment:
Land				$	118,000
Building	$	798,000
Less: Accumulated depreciation		(190,000	)		608,000
Equipment		174,450
Less: Accumulated depreciation		?			?
Total property, plant, and equipment					?

The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $38,000 for the building is anticipated.

The equipment is comprised of the following three machines:

Machine	Cost			Date Acquired		Residual Value				Life (in Years)
101	$	67,800		1/1/2018		$	6,800			10
102		78,200		6/30/2019			7,800			8
103		28,450		9/1/2020			2,800			9

The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $51,500. Early in 2021, the useful life of machine 101 was revised to seven years in total, and the residual value was revised to zero.

Required:

1. Calculate the accumulated depreciation on the equipment at December 31, 2020.
2. Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale.
3. Calculate the gain or loss on the sale of machine 102.
4. Prepare the journal entry for the sale of machine 102.
5. Prepare the 2021 year-end journal entries to record depreciation on the building and remaining equipment.

Answer 1

Answer as on Dec.31, 2020 on Egylement $61000 10 years & 6100 1. calculation of Accymylabel Depreciation machine tol - $ (67800 - 6800) 10 years Machine lor $(782007800) e yews & 7o4oo years Machine 103 & $ (28450 - 2800) – $25650 & $ 2850 9 years 9 yeus Tutal Accymylated Depreciation & 17,750 AT Journal Entry to record 2011 depreciation Glcylgtion of Depuciation Machine you & $78200 - $7800 x 8 years on machine lo2 upto dyle of sole upto march 31,2021. 3 = $2000 for 3 months DY. Journal Entry will be : Depreciation A/C Ak To Accymyl gled Depechalyon De 13. Calculation of Glwlition of 2015 Gain I 2055 on the sale of machine 102 Accumulated Degreciation upto March 31,2021. (48960 - 78002 x 6 months) 9 years 4400 2010 IN 2200 15400 March 31, 2021 78200 Glellation of Galg / taso Cost of machine - Accumulghed Depreciation (15400 62800 (515002 11300 - sales value tous on sale of machine.

Cash Als -ov Allmylight bepreciation Als - Dr. Loss on sale of machine Ale-Dr. To Machine 102 SISOD 15400 17300 78200 s. Year End Depreciation Tournal Entries Calculation of Depreciation Expeques 190000 on December 31 2021 of Building of Remaining pleaptation of appucigyon Exponor on December 31,2012 Equipment : 9) Machine rol FMV of machine tol on Jyny guy 1, 2021. Cost of machine io) on 1/1/2018 - Oppreciation for 2018 (67800 - 6800 loyers - Depreciation for 2019 " Depuciation for 2010 67800 (6106) 49500 Depreclyton Expenst for 202) 49500 - 7071 (6) machine 103 t 14:30 - - 2300 Pepe cly Han Al $ 2-850. $ 28450 - $ 2300 3 years Total Oppreciation for Equipment in - $ 7071 + $ 28.50 December 31, 2011 93211 180000 ggel Depresahan on Building Alf dr. Depuction on Egyerment Al - Dr. To Accymylple! Deprecyny Ak 159,91