Manchester Company sells equipment on June 1, 2021, for $222,400 cash. Manchester incurred $1,280 of removal and selling costs on disposal. The equipment cost $400,000 when it was purchased on January 2, 2018. Its estimated residual value and useful life were $64,000 and 10 years, respectively. Manchester uses straight-line depreciation and records annual depreciation on each December 31. Required:
a. Prepare the journal entries needed to record the asset disposal on June 1, 2021.
b. Record the journal entries if the equipment were abandoned (zero fair value) on June 1, 2021.

Answer and Explanation:

The journal entries are as follows:

But before that the accumulated depreciation for 3 years is as follows:

Cost $400,000  

Less: Residual value $64,000

Depreciable cost $336,000

Divide by Useful life 10  

Annual Depreciation $33,600  

Accumulated depreciation for 3 years $100,800 ($33,600 × 3 years)

Now the journal entries are as follows:

a.

On June 1, 2021        

Depreciation expense $14,000 ($33,600 × 5 months ÷ 12 months)

       To Accumulated Depreciation $14,000

(Being depreciation expense is recorded)

On June 1,2021        

Accumulated Depreciation $114,800 ($100,800 + $14,000)

Cash $221,120 ($222,400 - $1,280)

Loss on Disposal $64,080

       To Equipment $400,000

(Being the disposal of an asset is recorded)

b.

On June 1, 2021        

Depreciation expense $14,000 ($33,600 × 5 months ÷ 12 months)

       To Accumulated Depreciation $14,000

(Being depreciation expense is recorded)

On June 1,2021        

Accumulated Depreciation $114,800 ($100,800 + $14,000)

Loss on Disposal $285,200 ($221,120 + $64,080)

       To Equipment $400,000

(Being the disposal of an asset is recorded)

the first successful, urban blues recording, selling more than 75,000 copies, was made in year 1920.

mamie smith recorded the first commercially successful example of the urban blues,   with the recording of “crazy blues”."crazy blues" was recorded on august 10, 1920, in new york city. within a month of the release of “crazy blues” it had sold 75,000 copies.

lots of credit card rewards