On July 1, 2015, Morgan Office Supplies purchased a copier machine and recorded as office equipment...

 

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On July 1, 2015, Morgan Office Supplies purchased a copier machine and recorded as office equipment for $170,000 cash, with an estimated useful life of 8 years and a residual value of $10,000. The company uses a straight-line method of depreciation and its financial year ends on December 31, each year. On April 1, 2021, Morgan sold the copier for $60,000 cash. Required (explanation is not required for journal entry): (i) (ii) Prepare journal entry to record the sale of the copier on April 1, 2021. (4 marks) Assume that on April 1, 2021, Morgan exchanged the copier with a similar and more efficient copier. The trade-in allowance for the old copier was $60,000, and the cost of the new copier is $180,000. Journalize the exchange of similar asset. (4 marks) (iii) Assuming that Morgan Office uses the double-declining balance method of depreciation, prepare journal entry to record the depreciation expense on the copier for the year ended December 31, 2015. (2 marks) On July 1, 2015, Morgan Office Supplies purchased a copier machine and recorded as office equipment for $170,000 cash, with an estimated useful life of 8 years and a residual value of $10,000. The company uses a straight-line method of depreciation and its financial year ends on December 31, each year. On April 1, 2021, Morgan sold the copier for $60,000 cash. Required (explanation is not required for journal entry): (i) (ii) Prepare journal entry to record the sale of the copier on April 1, 2021. (4 marks) Assume that on April 1, 2021, Morgan exchanged the copier with a similar and more efficient copier. The trade-in allowance for the old copier was $60,000, and the cost of the new copier is $180,000. Journalize the exchange of similar asset. (4 marks) (iii) Assuming that Morgan Office uses the double-declining balance method of depreciation, prepare journal entry to record the depreciation expense on the copier for the year ended December 31, 2015. (2 marks)

Answer rating: 100% (QA)

Solution to i Solution to ii 1Jul15 31Dec15 Cost Depreciation Over 8 years WDV at 31 Dec ... View the full answer