Try another version of this question On January 2, 2019, Nikki Clothing Warehouse purchased showroom fixtures for $13,000 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 $5,900 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 5,900 Less: Book value of asset disposed of Cost 13,000 Less: Accumulated Depreciation 7,800 5,200 Gain or (Loss) 700 Date Description Debit Credit October 31 Depreciation Exp-Equipment 2,600 October 31 Accum. Depr.-Equipment 2,600 October 31 Cash 5,900 October 31 Accum. Depr.-Equipment 7,800 October 31 Equipment 13,000 October 31 Gain on Sale 700