Howarth Manufacturing Company purchased a lathe on June 30, 2007, at a cost of $80,000. The residual

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Howarth Manufacturing Company purchased a lathe on June 30, 2007, at a cost of $80,000. The residual value of the lathe was estimated to be $5,000 at the end of a five-year life. The lathe was sold on March 31, 2011, for $17,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.


Required:

1. Prepare the journal entry to record the sale.

2. Assuming that Howarth had instead used the sum-of-the-years'-digits depreciation method, prepare the journal entry to record the sale.


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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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