Assignment 4 - Chapter 6
Comm 204-Fall 2020
Question 2
On January 1, 2016, SuperCyce Limited purchased a machine
for $350,000. The machine was estimated to have a 7 year
useful life with a residual value of $25,000. The company used
the straight-line method to depreciate the machine.
On December 31, 2020, the company sold the equipment for
$123,000 cash. (9 marks)
Required
1. Calculate the gain or loss on sale on the sale of the
machine.
2. Prepare the journal entry to recognize the sale of the
machine.
Requirement # 1
DATE ACCOUNT DEBIT CREDIT
Assignment 4- Chapter 6
Comm 204-Fall 2020
Question 3
Prepare the journal entries for the following independent
situations to recognize the purchase and amortization for the
first year. Explanations are not required.
a) January 1, 2020, Explorer Ltd. paid $1,500,000 to acquire