Header dateaccountsdebutcredit Question 3 20 points On July

Question 3 (20 points) On July 1, 2016, Alpha Company purchased for $78,000, equipment having a service life of eight years and an estimated residual value of $6,000. Alpha has recorded depreciation of the equipment using the double-declining balance method. On December 31, 2019, before making any annual adjusting entries, the equipment was sold for $20,000. Use this information to prepare all General Journal entries (without explanation) required to record the sale event for December 31, 2019 eneral Journal: Date Accounts Debit Credit

Solution

Double declining balance method depreciation : Depreciation book value jul1 16 78000 dec 31 16 9750 68250 (half year depreciation) dec 31 17 17062.5 51187.5 dec 31 18 12796.88 38390.63 dec 31 19 9597.66 28792.97 Journal Entries: Debit $ Credit $ Dec 31 2019 Depreciation 9597.66 Acc Dep -equip 9597.66 Dec 31 2019 Acc Dep -equip 49207.03 Cash 20000 Loss on sale of equipment 8792.97 Equipment 78000