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Global Positioning Net purchased equipment on January 1, 2012, for $36,000. Global Positioning Net expected the equipment

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Global Positioning Net purchased equipment on January 1, 2012, for $36,000. Global Positioning Net expected the equipment to last for four years and to have a residual value of $4,000. Suppose Global Positioning Net sold the equipment for $26,000 on December 31, 2013, after using the equipment for two full years. Assume depreciation for 2013 has been recorded.
Requirement
1. Journalize the sale of the equipment, assuming straight-line depreciation was used.

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Financial and Managerial Accounting

Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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Related Video

In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue

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