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Prepare the journal entry to record the sale

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Question - On January 2, 2017 Belle Labatories Limited purchased a photocopier for $22,000. The photocopier has a useful life of 5 years or 1,000,000 pages and a residual value of $2,000. The owners of the company, Kaileigh, Gracie & Jess have been disagreeing about which method to use to depreciate the photocopier. The photocopier copied 250,000 pages in 2017; 170,000 in 2018 and 190,000 in 2019. On December 30, 2019 Bell Labatories sold the photocopier for $9,000. On January 5, 2020 Belle Labatories purchased land and building for a single price of $400,000 cash. The land has been appraised at a value of $84,000 and the building has been appraised at a value of $336,000.

Required -

A. Calculate depreciation for 2017, 2018 and 2019 under the three depreciation methods.

B. Prepare the journal entry to record the sale of the photocopier assuming they used the straight line method to depreciate the photcopier.

C. Which method should Belle Labatories use to depreciate the photocopier & why?

D. Prepare the journal entry to record the purchase of the land and building on January 5, 2020.

Reference no: EM132567111

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