Depreciation and Partial Periods The following assets are owned by the Dinnell Company:
|
Asset |
|||
|
A |
B |
C |
|
|
Year purchased |
2005 |
2006 |
2007 |
|
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 |
Sum 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 2008, asset A was sold for $7,000.
Required
Prepare the journal entries to record depreciation on each asset for 2005 through 2008 and the sale of asset A.