Chapter 3
Long-Term Assets
108
AP-17A (
3
4
)
Details of some of Stark Corporation’s long-term assets are listed below.
Date of
Purchase
Asset
Cost
Residual
Value
Estimated
Useful Life
Feb 1, 2013 Building
$370,600
$25,000
8 years
Sep 1, 2013
Truck
$51,400
$4,600
6 years
On August 1, 2016, Stark Corporation decides to dispose of both of these assets. The total
proceeds received for the assets were $246,000. Both assets use the straight-line depreciation
method based on the number of months owned in the year. Stark Corporation has a
December 31 year-end. Round all answers to the nearest whole number.
Required
a) Prepare the depreciation table.
Year
Cost of Long-Term
Asset
Depreciation
Expense
Accumulated
Depreciation
Net Book Value
Building
2013
2014
2015
2016
Truck
2013
2014
2015
2016
b) Prepare the journal entry to record the disposal of the assets.
Date
Account Title and Explanation
Debit
Credit
