On April 1,2015,due to Obsolescence Resulting from a New Technology,a

question 126

Essay

On April 1,2015,due to obsolescence resulting from a new technology,a company discarded a computer that cost $5,000,had a useful life of 4 years,and a salvage value of $400.Based on straight-line depreciation,the accumulated depreciation as of December 31,2014 was $3,450.
a.Prepare the journal entry to record depreciation up to the date of disposal of the computer.
b.Prepare the journal entry to record the disposal of the computer.

---

Definitions:

Normal Rate Of Return

A rate of return on capital that is just sufficient to keep owners and investors satisfied. For relatively risk-free firms, it should be nearly the same as the interest rate on risk-free government bonds.

Economic Loss

A situation where the cost of making a product is greater than the revenue gained from selling it, resulting in a negative economic outcome.

Normal Rate Of Return

The average expected or required return on an investment or project, reflecting the usual profit level for the market or industry.

Last Dollar Spent

The concept referring to the allocation of the final unit of currency in an economic decision-making process.