Question

On January 2,2017, Comfy Clothing Consignments ourchased showroom fixtures for $17,000 cash, expecting the fixtures to remain in service for five years. Comfy has depreciated the fixtures on the double-declining-balance basis, with zero residual value. On October 31,2018, Comfy sold the fixtures for $7,600 cash. Record both depreciation for 2018 and sale of the fixtures on October 31,2018.

3,400 Oct 31 Depreciation Expense-Fixtures Accumulated Depreciation Fixtures 3,400 To record depreciation on fixtures. Before recording the sale of the fixtures, let's calculate any gain or loss on the sale of the fixtures. Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss) Enter any number in the edit fields and then click Check Answer.

Answer 1

Credit Date Oct 31 Debit $3,400 $3,400 Oct 31 Accounts & Explanation Depreciation Expense- Fixtures Accumulated Depreciation- Fixtures (To record Depreciation on Fixtures) Cash Accumulated Depreciation- Fixtures Gain on Sale of Fixtures Fixtures (To record Sale of Fixtures) $7,600 10,200 $8001 17,000 Working Note: $7,600 Market Value of Assets Received Less: Book Value of Asset Disposed of Cost Less: Accumulated Depreciation Gain or (Loss) $17,000 (10,200) $6,800 $800 Calculation of Depreciation under Double Diminishing Balance method Rate of Depreciation 1/useful life 115 20% 2*20% 40% Year 2017 2018 Beginning value $17,000 $10,200 Depreciation rate Depreciation expense 40% $6,800 33.33% $3,400 Accumulated Depreciation $6,800 10,200 Book Value $10,200 $6,800 *** Calculation of depreciation for 2018 $10,200*40%*10 months $3,400