Lumen OHM Assessment

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Question 1

Fixtures costing $48,900 were purchased by Pet Salon on January 2, 2018. They were expecting the fixtures to remain in service for 7 years.
The Pet Salon depreciated the fixtures on a straight-line basis, with $3,000 residual value. On May 31, 2020, Pet Salon sold the fixtures for $25,700 cash.

Record both depreciation expense for 2020 and sale of the fixtures on May 31, 2020.

Straight-line Depreciation method:

Statement
Market value of assets received
Less: Book value of asset disposed of
Cost
Less: Accumulated Depreciation
Gain or (Loss)

Journal
Date	Description	Debit	Credit
May 31
May 31
May 31

May 31
May 31
May 31
May 31

Statement
Market value of assets received		25,700.00
Less: Book value of asset disposed of
Cost	48,900.00
Less: Accumulated Depreciation	15,846.43	33,053.57
Gain or (Loss)		-7,353.57

Journal
Date	Description	Debit	Credit
May 31	Depreciation Exp-Fixture	2,732.14
May 31	Accum. Depr.-Fixture		2,732.14

May 31	Cash	25,700.00
May 31	Accum. Depr.-Fixture	15,846.43
May 31	Loss on Sale	7,353.57
May 31	Fixture		48,900.00