[nikita41]

Foster glass company purhcased a fax machine for 1800, salvage value of $300 with useful life of three years. Assume foster uses the doulble-declining balance (DDB) depreciation method.

Foster decided to replace its fax machine with a bizhub on July 1,2008. Eagle Outfitters offered to buy the used fax machine from foster for $1,000.

record on Foster books for July 1, 2008 journal entry detailing the sale of the fax machine.

[pready]

Your problem does not state when the fax machine was purchased so you cannot compute the amount of depreciation expense for 2008.

If the fax machine is fully depreciated the journal entry will be:
Debit Cash for 1,000
Debit Accumulated Depreciation for 1500
Credit Property, Plant, & Equipment for 1800
Credit Gain on Sale for 500

The journal entry for your sale will be similar except your depreciation amount may be different. The diffeence between your debits of cash plus accumulated depreciation with your credit of PP&E, if any will be either Loss on Sale (Debit) or a Gain on Sale (Credit).

If your fax is not fully depreciated you may have to record the depreciation expense to get the dpreciation up to date. The entry for this will be:
Debit Dpreciation Expense for the amount of depreciation
Credit Accumulated Depreciation for the amount of depreciation

[nikita41]

Please see below the all the information for solving this problems.

Foster glass company purhcased July a fax machine for 1800 on July 1, 2007, salvage value of $300 with useful life of three years. Assume foster uses the doulble-declining balance (DDB) depreciation method.

Foster decided to replace its fax machine with a bizhub on July 1,2008. Eagle Outfitters offered to buy the used fax machine from foster for $1,000. (proceeds receved upon purchase)

Record on Foster books for July 1, 2008 journal entry detailing the sale of the fax machine.


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[pready]

I already posted on how to solve your problem. I assume your accumulated depreciation is up to date as of Jan1 2008, so you will have to calculate your depreciation expense for 6 months of year one to get your accoumulated depreciation up to date, then you can follow my precious post for your journal entries.

[nikita41]

He purchased the fax machine July 1, 2007. Please help.

[pready]

Based on what information you have provided I assume you have not recorded any Depreciation for the asset, so you have to calculate the depreiation for one year.

Here is your formula: Cost of asset is $1,800 * 1/3(number of years useful life) * 2 to get your Depreciation expense using the double declining balance method.

The journal entry to record your depreciation is:
Debit Depreciation Expense for the amount calculated above
Credit Accumulated Depreciation for the amount calculated above.

Now you can record the sale of the asset. The journal entry will be:
Debit Cash for 1,000
Debit Accumulated Depreiation for the amount calculated above
Credit PP&E for 1,800
And you will have either a debit to loss on sale if your credits are higher than your debits for the difference between your debits and credits, or you will have a credit to Gain on Sale for the difference between your debits and credits.

[mspamadi]

Debit Cash for 1,000
Debit Accumulated Depreciation for 1200
Credit Equipment for 1800
Credit Gain for 400


I JUST GOT THIS CORRECT ON MY MODULE