Question

Oriole Company owns equipment that cost $63,200 when purchased on January 1, 2016. It has been depreciated using the straight-line method based on an estimated salvage value of $5,000 and an estimated useful life of 5 years. Accumulated deprecation was last adjusted on December 31, 2018. Prepare Oriole Company's journal entries to record the sale of the equipment in these four independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g.125. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) (d) Sold for $29,920 on January 1, 2019. Sold for $29,920 on May 1, 2019. Sold for $10,800 on January 1, 2019. Sold for $10,800 on October 1, 2019. No. Account Titles and Explanation Debit Credit (a) (b) (To record depreciation)

Answer 1

	Annual Depreciation as per SLM =($63,200 - $5,000) / 5 years =$11,640
	Depreciation for 4 months =$11,640*4/12 =$3,880
	Depreciation for 9 months =$11,640*9/12 =$8,730
	Book value as on Dec 31,2018 =$63,200 - ($11,640*3) =$28,280
	Book value as on May 1,2019 =$63,200 - ($11,640*3) - $3,880
	Book value as on May 1,2019 =$63,200 - $34,920 - $3,880 =$24,400
	Book value as on Oct 1,2019 =$63,200 - ($11,640*3) - $8,730
	Book value as on Oct 1,2019 =$63,200 - $34,920 - $8,730 =$19,550
Date	Account and explanation	Debit	Credit
Jan 1,2019	Cash	$29,920
	Accumulated Depreciation	$34,920
	Equipment		$63,200
	Gain on sale of equipment		$1,640
May 1,2019	Cash	$29,920
	Accumulated Depreciation	$38,800
	Equipment		$63,200
	Gain on sale of equipment		$5,520
Jan 1,2019	Cash	$10,800
	Accumulated Depreciation	$34,920
	Loss on sale of equipment	$17,480
	Equipment		$63,200
Oct 1,2019	Cash	$10,800
	Accumulated Depreciation	$43,650
	Loss on sale of equipment	$8,750
	Equipment		$63,200