Question

The Coca-Cola Company’s annual report for the year ended December 31, 2011, included the following ($ in millions):
Property, plant, and equipment ...... $ 23,151
Less: Accumulated depreciation .... 8,212
$ 14,939
Assume that on January 1, 2012, Coca-Cola acquired some new bottling equipment for $1.6 million cash. The equipment had an expected useful life of 4 years and an expected residual value of $400,000. Coca-Cola uses straight-line depreciation.
1. Prepare the journal entry that Coca-Cola would make annually for depreciation on the new equipment.
2. Suppose Coca-Cola sold some of the equipment it had purchased on January 1, 2012. The equipment being sold had an original cost of $80,000 and an expected residual value of $15,000. Coca-Cola sold the equipment for $42,000 cash 2 years after the purchase date. Prepare the journal entry for the sale.
3. Refer to requirement 2. Suppose Coca-Cola had sold the equipment for $51,000 cash, instead of $42,000. Prepare the journal entry for the sale.



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  • CreatedFebruary 20, 2015
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