Question

Rockwell Automation is a leading provider of industrial automation power and controls. The annual report indicates that the company uses straight-line depreciation for its property and equipment. In addition, the annual report said, “Gains or losses on property transactions are recorded in income in the period of sale or retirement.”
Suppose Rockwell received $5 million for property and equipment that it sold.
1. Assume that Rockwell originally acquired the total property and equipment in question for $60 million and received the $5 million in cash. There was a loss of $8.5 million on the sale. Compute the accumulated depreciation on the property and equipment sold. Show the effects of the sale on the balance sheet equation, identifying all specific accounts by name.
2. (a) Show the journal entry and postings to T-accounts for the transaction in requirement 1.
(b) Repeat 2a, assuming that the cash sales price was $18 million cash instead of $5 million.



$1.99
Sales0
Views59
Comments0
  • CreatedFebruary 20, 2015
  • Files Included
Post your question
5000