Reference no: EM131408341
Gidley, Inc. purchased a piece of equipment on January 1, 2011. The following information is available for this purchase:
REQUIRED:
a. Compute the cost of the fixed asset that should be capitalized.
b. Prepare the entry to record depreciation expense for the year ended December 31, 2011, assuming the company uses each of the following:
(1) Double-declining-balance depreciation method
(2) Straight-line depreciation method
c. Assuming that the equipment was sold on January 1, 2012, for $250,000, prepare the entry to record the sale of the equipment using each of the following methods:
(1) Double-declining-balance depreciation method
(2) Straight-line depreciation method
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