Equipment Acquired at a Cost of $126,000 Has a Book $\$ 54,000$

question 158

Essay

Equipment acquired at a cost of $126,000 has a book value of $42,000. Journalize the disposal of the equipment under the following independent assumptions. (a) The equipment had no market value and was discarded.
(b) The equipment is sold for $\$ 54,000$ .
(c) The equipment is sold for $\$ 24,000$ .
(d) The equipment is traded-in for a similar asset. The list price of the new equipment is $\$ 63,000$ . The buyer gave no cash in the exchange. The transaction lacks commercial substance. ​
Journal $$\begin{array} { | l | l | l | l | l | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline & & & & \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline\end{array}$$

Identify and calculate net working capital and its impact on cash flows.

Analyze and decide on capital budgeting projects using discounted cash flow techniques.

Evaluate the cost-effectiveness of machinery or equipment through comparison of equivalent annual cost and other financial metrics.

Distinguish between relevant and irrelevant costs, including sunk costs, opportunity costs, and incremental costs, in project analysis.

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Definitions:

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Taxes assessed on land and buildings, based on their value, by local governments for funding public services.

Local Benefits

Local Benefits refer to services or provisions provided by local government to residents, often financed through targeted taxes or assessments, like improvements that increase property values.

Kirkpatrick

A model for evaluating the effectiveness of training divided into four levels: reaction, learning, behavior, and results.

Locke's Research

An investigation into goal setting and motivation by Edwin Locke, emphasizing the importance of setting specific and challenging goals.