Asked by
Emran Metzger
on Dec 04, 2024
Verified
Wilson Engineering purchased a depreciable asset costing $45,000 on January 1, Year 1. The asset is estimated to have a residual value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the asset is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include:
A) A credit to cash for $20,000.
B) A debit to accumulated depreciation for $22,500.
C) A debit to loss on sale for $10,000.
D) A credit to loss on sale for $10,000.
E) A debit to gain on sale for $2,500.
Depreciable Asset
An asset subject to depreciation, which is the spreading out of its cost over the duration of its useful life.
- Calculate depreciation using different methods, including straight-line, units-of-production, and declining-balance.
- Understand the financial impact of disposing of assets, including recognizing gains or losses.
Verified Answer
IR
Learning Objectives
- Calculate depreciation using different methods, including straight-line, units-of-production, and declining-balance.
- Understand the financial impact of disposing of assets, including recognizing gains or losses.