Try another version of this question On January 2, 2019, Nikki Clothing Warehouse purchased showroom fixtures for $10,000 cash, expecting the fixtures to remain in service for 5 years.
Nikki Clothing Warehouse has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On October 31, 2020, Nikki Clothing Warehouse sold the fixtures for $6,100 cash.
Record both depreciation expense for 2020 and sale of the fixtures on October 31, 2020.
Double Declining Balance Method: Market value of assets received Less: Book value of asset disposed of Cost Less: Accumulated Depreciation Gain or (Loss)
Date Description Debit Credit October 31 October 31 October 31 October 31 October 31 October 31 October 31
Market value of assets received 6,100 Less: Book value of asset disposed of Cost 10,000 Less: Accumulated Depreciation 6,000 4,000 Gain or (Loss) 2,100 Date Description Debit Credit October 31 Depreciation Exp-Equipment 2,000 October 31 Accum. Depr.-Equipment 2,000 October 31 Cash 6,100 October 31 Accum. Depr.-Equipment 6,000 October 31 Equipment 10,000 October 31 Gain on Sale 2,100