Question

Please help me. I need help with these questions. Thank you.

Required information CC9-1 Accounting for the Use and Disposal of Long-Lived Assets [LO 9-3, LO 9-5] [The following information applies to the questions displayed below] Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $13,500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,300 hours; year 2, 2,450 hours; year 3, 2,150 hours; year 4, 2,100 hours; and year 5, 1,000 hours. СС9-1 Part 2 2. Assume NGS sold the hydrotherapy tub system for $4,050 at the end of year 3. Prepare the journal entry to account for the disposal of this asset under the three different methods. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest dollar amount.)

Answer 1

2a) Journal entry : Straight line

date	account and explanation	Debit	Credit
Year 3	Cash	4050
	Accumulated depreciation-equipment (13500-500/5*3)	7800
	Loss on disposal of equipment	1650
	Equipment		13500
	(To record disposal of equipment)

2b) Journal entry : Unit of production

date	account and explanation	Debit	Credit
Year 3	Cash	4050
	Accumulated depreciation-equipment (6900*1.3)	8970
	Loss on disposal of equipment	480
	Equipment		13500
	(To record disposal of equipment)

2c) Journal entry : Double decline

date	account and explanation	Debit	Credit
Year 3	Cash	4050
	Accumulated depreciation-equipment (13500-2916)	10584
	Gain on disposal of equipment		1134
	Equipment		13500
	(To record disposal of equipment)