Soule Corporation Purchased a Machine That Had an Original Cost

question 115

Essay

Soule Corporation purchased a machine that had an original cost of $60,000 and an estimated residual value of $10,000.The useful life was expected to be 8 years and straight-line depreciation is used.At the end of 20E,the book value of the machine was $35,000.Soule sold the machine for $32,000 cash on October 1,20F.
Required:A.Prepare the journal entry to record depreciation for 20F up to the date of sale.Round the amount to the nearest dollar.B.Prepare the journal entry to record the sale of the machine.

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Definitions:

Dollar

A currency unit used by the United States and other countries, represented by the symbol $, and used as a standard monetary unit in international transactions.

Exchange Rate

The price of one currency in terms of another currency, which determines how much foreign currency one can buy with a unit of domestic currency.

Euros

The formal monetary system adopted by 19 out of the 27 countries within the European Union, commonly referred to as the eurozone.

Appreciated

Refers to an increase in the value of an asset over time.