On June 30, 2009, Newsom Company sold equipment for $7,250 that had been acquired for $14,500 on January 1, 2007 Newsom originally estimated that the computer would have a ve year useful life and a $500 salvage value Newsom uses straight line depreciation The companys scal year ends on December 31 ...

Calculations Cost Salvage Value Depreciable Amount Useful Life years 14500 500 14000 ...

On June 30, 2009, Newsom Company sold equipment for $7,250 that had been acquired for $14,500 on

Question:

On June 30, 2009, Newsom Company sold equipment for $7,250 that had been acquired for $14,500 on January 1, 2007. Newsom originally estimated that the computer would have a ﬁve-year useful life and a $500 . Newsom uses straight-line depreciation. The company’s ﬁscal year ends on December 31 and records depreciation expense at the end of each ﬁscal year.
Required:
(a) Determine the book value of the computer on December 31, 2008.
(b) Prepare all entries needed on June 30, 2009, to properly account for the disposal of the computer.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...