Part 3: PP&E; Transactions 8) Lyra Inc. buys equipment on October 1.2017 for $15
ID: 2546931 • Letter: P
Question
Part 3: PP&E; Transactions 8) Lyra Inc. buys equipment on October 1.2017 for $150,000 cash. They estimate the equipment will have a salvage value of $25,000 and a useful life of 10 years. a. Write the journal entry to record depreciation for 2017. 12/31/17 b._Record the journal entry to record depreciation expense for the second year 12/31/18 c. What is the book value of this equipment on the December 31, 2018 Balance 9) Puppis Industries purchased equipment on July 1, 2017 for $140,000. The equipment is estimated to have a $15,000 salvage value at the end of its 5-year life. The company uses straight-line method of depreciation. What is the balance in accumulated depreciation at 12/31/20?Explanation / Answer
8) Journal entry :
c) Book value of equipment = 150000-(12500+3125) = 134375
9) Straight line dep = (140000-15000/5) = 25000
Accumlated depreciation = 25000*3.50 = 87500
10) Depreciation expense = (123000-21000/8) = 12750
Accumlated depreciation = (12750*2/12+85876) = 88001
Book value = 123000-88001 = 34999
Gain on sale = 55000-34999 = 20001
Journal entry :
Date accounts & explanation debit credit 12/31/17 Depreciation expense (150000-25000/10)*3/12 3125 Accumlated depreciation 3125 12/31/18 Depreciation expense 12500 Accumlated depreciation 12500