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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.