june 30 sold a computer that was purchased on january 1, 2025. the computer cost $35,400 and had a useful…

june 30 sold a computer that was purchased on january 1, 2025. the computer cost $35,400 and had a useful life of 4 years with no salvage value. the computer was sold for $5,600 cash. dec. 31 sold a delivery truck for $9,280 cash. the truck cost $25,000 when it was purchased on january 1, 2024, and was depreciated based on a 5 - year useful life with a $3,700 salvage value. prepare a tabular summary to record all transactions described on the above dates. update depreciation on assets disposed of, where applicable. pronghorn corporation uses straight - line depreciation. (if a transaction causes a decrease in assets, liabilities or stockholders equity, place a negative sign (or parentheses) in front of the amount entered for the particular asset, liability or equity item that was reduced.) assets = liabilities + stockholders equity cash + equipment - accum. depr. - equip. = + common stock + revenue - expense - retained earnings jan. 1 $ 0 $ -62000 $ 62000 $ 0 $ 0 $ 0 june 30 0 0 0 0 0 0 5600 -35400 22125 0 0 0 dec. 31 0 0 0 0 0 0 9280 0 0 0 0 0 etextbook and media

june 30 sold a computer that was purchased on january 1, 2025. the computer cost $35,400 and had a useful life of 4 years with no salvage value. the computer was sold for $5,600 cash. dec. 31 sold a delivery truck for $9,280 cash. the truck cost $25,000 when it was purchased on january 1, 2024, and was depreciated based on a 5 - year useful life with a $3,700 salvage value. prepare a tabular summary to record all transactions described on the above dates. update depreciation on assets disposed of, where applicable. pronghorn corporation uses straight - line depreciation. (if a transaction causes a decrease in assets, liabilities or stockholders equity, place a negative sign (or parentheses) in front of the amount entered for the particular asset, liability or equity item that was reduced.) assets = liabilities + stockholders equity cash + equipment - accum. depr. - equip. = + common stock + revenue - expense - retained earnings jan. 1 $ 0 $ -62000 $ 62000 $ 0 $ 0 $ 0 june 30 0 0 0 0 0 0 5600 -35400 22125 0 0 0 dec. 31 0 0 0 0 0 0 9280 0 0 0 0 0 etextbook and media

Answer

Explanation:

Step1: Calculate computer depreciation

The computer cost $35,400 with no - salvage value and a 4 - year useful life. The annual depreciation using straight - line method is $\frac{35400}{4}=8850$. From January 1, 2025 to June 30, 2025 (6 months or 0.5 years), the depreciation is $8850\times0.5 = 4425$.

Step2: Update computer's accumulated depreciation

Before disposal, the accumulated depreciation of the computer is $4425$.

Step3: Calculate gain or loss on computer disposal

The book value of the computer at disposal is $35400 - 4425=30975$. It is sold for $5600$, so the loss is $30975 - 5600 = 25375$.

Step4: Calculate truck depreciation

The truck cost $25,000 with a $3,700 salvage value and a 5 - year useful life. The annual depreciation is $\frac{25000 - 3700}{5}=\frac{21300}{5}=4260$. From January 1, 2024 to December 31, 2024 (1 year) and January 1, 2025 to December 31, 2025 (1 year), the total depreciation is $4260\times2 = 8520$.

Step5: Update truck's accumulated depreciation

Before disposal, the accumulated depreciation of the truck is $8520$.

Step6: Calculate gain or loss on truck disposal

The book value of the truck at disposal is $25000 - 8520 = 16480$. It is sold for $9280$, so the loss is $16480 - 9280=7200$.

Date Cash Equipment Accum. Depr. - Equip. Common Stock Revenue Expense Retained Earnings
Jan. 1 0 - 62000 (This value seems not related to given transactions, assume it's a previous balance) 62000 (This value seems not related to given transactions, assume it's a previous balance) 0 0 0 0
June 30 5600 - 35400 4425 0 0 25375 - 25375
Dec. 31 9280 - 25000 8520 0 0 7200 - 7200

Answer:

Date Cash Equipment Accum. Depr. - Equip. Common Stock Revenue Expense Retained Earnings
Jan. 1 0 - 62000 62000 0 0 0 0
June 30 5600 - 35400 4425 0 0 25375 - 25375
Dec. 31 9280 - 25000 8520 0 0 7200 - 7200