12. On October 1, 2018, Mack Company places a new asset into service. The cost of the
asset is $9,000 with an estimated 5-year life and $1,000 salvage value at the end of its
useful life. What is the balance in the Accumulated Depreciation account at 12/31/20 if
Mack Company uses the straight-line method of depreciation?
A) $3,600
B) $1,600
C) $2,000
D) $4,050
PROBLEMS
***USE ANSWER SHEET***
13. (5 points) Mack Company purchased equipment in 2018 for $100,000 and estimated an
$10,000 salvage value at the end of the equipment's 10-year useful life. At December 31,
2024, there was $63,000 in the Accumulated Depreciation account for this equipment
using the straight-line method of depreciation. On March 31, 2025, the equipment was
sold for $29,000.
Instructions: Prepare the appropriate journal entries to remove the equipment from the
books of the Mack Company on March 31, 2025.
14. (5 points) On 12/31/18 The Deere Company sold office equipment that had a book value
of $5,400 for $8,000. The office equipment originally cost $20,000 and it is estimated
that it would cost $21,000 to replace the office equipment.
Instructions: Prepare the appropriate journal entry to record the disposition of the office
equipment.
