Chapter 3
Long-Term Assets
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AP-24B (
3
4
)
A company purchased equipment for $50,000 on March 1, 2015. It is expected to last for four
years and have a residual value of $10,000. Assume that the company has adopted a partial-
year depreciation policy, wherein half a year's depreciation is taken in the year of purchase,
and half a year's depreciation is recorded in the year of disposal. The asset is sold on
January 18, 2017 for $20,000.
Required
a) Prepare the depreciation table. The company uses straight-line depreciation.
Year
Cost of Long-Term
Asset
Depreciation
Expense
Accumulated
Depreciation
To Date
Net Book Value
b) Prepare the journal entry to record the sale.
Date
Account Title and Explanation
Debit
Credit
