Presented below are selected transactions at Tongun Company for the financial year ending 30 June...
Question:
Presented below are selected transactions at Tongun Company for the financial year ending 30 June 2019.
| 1 July 2018 | Retired a piece of machinery that was purchased on 1 July 2008. The machine cost $62,000 on that date. It had a useful life of 10 years with no residual value. |
| 1 Jan. 2019 | Sold a computer that was purchased on 1 July 2015. The computer cost $35,000. It had a useful life of 5 years with no residual value. The computer was sold for $12,000. |
| 30 June 2019 | Discarded a delivery truck that was purchased on 1 July 2014. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 residual value. |
Journalise all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Tongun Company uses straight-line depreciation. (Assume depreciation is up to date as of 30 June 2018.)
Accumulated Depreciation:
Accumulated depreciation is associated with fixed assets such as delivery equipment, machinery, building, building improvements, office equipment, furnitures&fixtures, transportation equipment and leasehold improvements. A systematic allocation of the cost of these fixed assets is periodically charge to the corresponding debit to depreciation expense and credit to accumulated depreciation.
Answer and Explanation: 1
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View this answer| 1 July 2018 | Retired a piece of machinery that was purchased on 1 July 2008. The machine cost $62,000 on that date. It had a useful life of 10 years... |
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How to Account for Asset Disposal
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Chapter 9 / Lesson 10
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This lesson provides an overview on how to account for the disposal of capital assets. Learn about the value of an asset, as well as how to account for asset sales, retirement, and exchanges.
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