Prepare journal entry to record sale of lathe
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E 11-32 Howarth Manufacturing Company purchased a lathe on June 30, 2007, at a cost of $80,000. The residual value of the lathe was estimated to be $5,000 at the end of a five-year life. The lathe was sold on March 31, 2011, for $17,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.
Required:
1. Prepare the journal entry to record the sale.
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Solution Summary
The expert prepares journal entry to record sales of lathe.
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Monthly depreciation=(80000-5000)/(12*5)=1250
The lathe is in service for 45 months.
So accumulated ...
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