On January 1, 2016, WAX-D purchased equipment for $60,000 cash, expecting it to remain in service for six years
The equipment is depreciated using the straight-line method with $2,000 estimated residual value. On April 30, 2018, the equipment was sold for $48,000 cash. Record depreciation expense for 2018 and the sale of the equipment on April 30, 2018. (Do not round your intermediate calculations.)
What will be an ideal response
Depreciation Expense—Equipment* 3,222
Accumulated Depreciation—Equipment 3,222
Cash 48,000
Accumulated Depreciation—Equipment** 22,555
Gain on Disposal 10,555
Equipment 60,000
Accumulated Depreciation on 12-31-2016 = ($60,000 - $2,000 ) / 6 x 2 = $19,333
*Depreciation for the period 1-1-2017 to 4-30-2017 = ($60,000 - $2,000 ) / 6 x 4/12 = $3,222
**Accumulated Depreciation = $19,333 + $3,222 = $22,555
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