Presented Below Are Selected Transactions for the Tinker Company for 2015

question 246

Essay

Presented below are selected transactions for the Tinker Company for 2015.
Jan. 1 Retired a piece of equipment that was purchased on January 1, 2005. The equipment cost $75,000 on that date, and had a useful life of 10 years with no salvage value.
April 30 Sold equipment for $38,000 that was purchased on January 1, 2012. The equipment cost $105,000, and had a useful life of 5 years with no salvage value.
Dec. 31 Discarded equipment that was purchased on June 30, 2011. The equipment cost $42,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.
Instructions
Journalize all entries required as a result of the above transactions. Tinker Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2014.

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Definitions:

Precision Drills

Specialized tools or equipment designed for creating holes with exact dimensions and tolerances.

Oil Exploration

The process of searching for underground or underwater oil reserves with the goal of drilling and extracting oil.

Standard Costs

Predetermined costs for manufacturing a product or providing a service, used as benchmarks to measure performance.

Materials Price Variance

The difference between the actual cost of materials and the expected cost at standard prices.