Chapter 3
Long-Term Assets
95
AP-5A (
3
4
)
Equipment was purchased on December 31, 2012 for $50,000. The asset is expected to last for
four years, at which time the estimated residual value will be $10,000.
Required
a) Prepare a table showing the year, the cost of the asset, the amount of depreciation
expense each year, accumulated depreciation to date and net book value. The company
uses straight-line depreciation.
Year
Cost of Long-Term
Asset
Depreciation
Expense
Accumulated
Depreciation
To Date
Net Book Value
b) The asset was sold for $12,000 cash on the first day of 2017. Prepare the journal entry to
record the sale.
Date
Account Title and Explanation
Debit
Credit
c) Using the same purchase information at the beginning of the question, prepare the table
assuming that the company used double-declining-balance depreciation and the asset
had no residual value.
Year
Net Book Value at
the Beginning of
the Year
Depreciation
Expense
Accumulated
Depreciation
To Date
Net Book Value at
the End of the Year
