accounting question

[Cash Only]

any type of help, such as how to get the answer would be helpful!

On January 1, 2011, Juniper Manufacturing Company purchased equipment for $106,000. Juniper paid $2,000 to have the machine installed. The equipment is expected to have a 5 year useful life and a salvage value of $13,000.

a) At what dollar amount should this equipment be recorded in Juniper's accounting records?

b) Compute depreciation expense for 2011 and 2012 using straight line depreciation.

c) What is the book value at the beginning of 2013?

d) Assume the equipment was sold on January 1, 2013, for $85,000. Compute the amount of gain or loss from the sale.

e) Prepare the journal entry to record the sale of the equipment using the information in part d).

 

[maihannijat]

Equipment purchased account is asset and chase is decreased which is credit. let create Journal entry for this.

(now lets create another entry to record installation expenses)

                                                  Dr            Cr

01.Jan.2011        Equipment purchased        106000 
                                 Cash                           106000

(now lets create another entry to record installation expenses)

                                                  Dr            Cr

01.Jan.2011        Installation expenses        2000 
                                 Cash                           2000

(time to calculate depreciation value.)

Depreciation Value= book value-salvage value/years
Deprecation value= 106000-13000/5= 18600

The depreciation value for each year is 18600 and now you want to calculate for two years 2011 and 2012.

Lets multiply this 18600*2= 37200 shows the depreciation value for two years. and the book value for the year 2013 is 106000-13000= 93000 and now subtract 93000-37000= 55800

The book value for year 2013 is 55800


We sold out the equipment in 01.01.2013 for 85000 and need to calculate the lost or gain.

The depreciation value for year 2013 was 55800 and salvage value is 13000= 68800

This 68800 means the value of machinery in 2013 including salvage.

we sold the machinery for 85000 - 68800= 16200

gain was 16200.


(Time to insert entry for sale of equipment)

                              Dr            Cr

01.Jan.2011        Cash        85000
                      Equipment           85000

This was all the calculation and now you need adjusting entries to complete the job. I am not good in that. lol