Depreciation and Partial Periods
Response to the following problem:
The following assets are owned by the Dinnell Company:
|
|
Asset
|
|
A
|
B
|
C
|
|
Year purchased
|
2008
|
2009
|
2010
|
|
cost
|
$20,000
|
$40,000
|
$100,000
|
|
Expected life
|
5 years
|
8 years
|
10 years
|
Residual value
|
$2,000 |
|
$ 10,000 |
Depreciation method
|
Straight-line |
Surn-of-the-years'-digits |
Double-declining-balance |
In the year of acquisition and retirement of an asset, the company records depreciation for one-half year. During 2011, asset A was sold for $7,000.
Required:
Prepare the journal entries to record depreciation on each asset for 2008 through 2011 and the sale of asset A.