Chapter 3
Long-Term Assets
131
AP-17B (
3
4
)
Details of some of Lannister Inc.’s long-term assets are listed below.
Date of
Purchase
Asset
Cost
Residual
Value
Estimated
Useful Life
Mar 30, 2013 Equipment
$127,800
$18,000
10 years
Jul 1, 2013 Machinery
$95,800
$25,000
12 years
On April 30, 2016, Lannister Inc. decides to dispose of both of these assets. The total proceeds
received for the assets were $180,000. Both assets use the straight-line depreciation method
based on the number of months owned in the year. Lannister Inc. 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
Equipment
2013
2014
2015
2016
Machinery
2013
2014
2015
2016
b) Prepare the journal entry to record the disposal of the assets.
Date
Account Title and Explanation
Debit
Credit
