cwaller
Oct 23, 2010, 10:20 AM
Ace Corporation purchased equipment on July 1, 2009 for the following:
Purchase price $100,000
Sales tax 6,000
Installation 3,000
Delivery 1,000
Total $110,000
Ace estimates that it will use the equipment for five years and its residual value will be $10,000. Ace uses the straight line method of depreciation and its accounting year end is December 31.
On December 31, 2010 Ace sells the equipment for $75,000.
Required: Prepare all necessary journal entries and adjusting journal entries for Ace for 2009 and 2010.
Purchase price $100,000
Sales tax 6,000
Installation 3,000
Delivery 1,000
Total $110,000
Ace estimates that it will use the equipment for five years and its residual value will be $10,000. Ace uses the straight line method of depreciation and its accounting year end is December 31.
On December 31, 2010 Ace sells the equipment for $75,000.
Required: Prepare all necessary journal entries and adjusting journal entries for Ace for 2009 and 2010.