Problemmason company purchased equipment on august 1 2013, Ask an Expert

Accounting

Problem

Mason Company purchased equipment on August 1, 2013, for $95,000. It is estimated that the equipment will have a $5,000 residual value at the end of its 5-year useful life.

Instructions:

1. Compute the amount of depreciation expense for the year ended December 31, 2013, using the straight-line method of depreciation.

2. Compute the amount of depreciation expense for the year ended December 31, 2014, using the double-declining balance method of depreciation.

3. If the company uses the double-declining balance method of depreciation, what is the book value of the equipment at December 31, 2014?

4. Assume the company uses straight-line depreciation and sells the equipment on December 31, 2017 for $12,000. Prepare the journal entry on December 31, 2017 to record the disposal.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92751511

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