The following are some transactions of Carla Vista Company for 2021. Carla Vista Company uses straight-line depreciation
Question:
The following are some transactions of Carla Vista Company for 2021. Carla Vista Company uses straight-line depreciation and has a December 31 year end.
Apr. 1
Retired a piece of equipment that was purchased on January 1, 2012, for $56,000. The equipment had an expected useful life of 10 years with no residual value.
July 30
Sold equipment for $1,300 cash. The equipment was purchased on January 3, 2019, for $14,040 and was depreciated over an expected useful life of three years with no residual value.
Nov. 1
Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash. The old vehicle had been purchased on November 1, 2015, at a cost of $35,800. The estimated useful life was eight years and the estimated residual value was $7,000. The fair value of the old vehicle was $9,400 on November 1, 2021.
a) For each of these disposals, prepare a journal entry to record depreciation from January 1, 2021, to the date of disposal, if required.
b) Record the disposals (Apr. 1, Jul. 30 and Nov. 1 )
Canadian Income Taxation planning and decision making
ISBN: 9781259094330
17th edition 2014-2015 version
Authors: Joan Kitunen, William Buckwold