Sample content EXERCISE 9-9 Jan. 1 Accumulated Depreciation—Equipment 58,000 Equipment 58,000 June 30 Depreciation Expense  4,000 Accumulated Depreciation—Equipment ($40,000 X 1/5 X 6/12)  4,000 30 Cash 14,000 Accumulated Depreciation—Equipment ($40,000 X 3/5 = $24,000; $24,000 + $4,000) 28,000 Gain on Disposal of Plant Assets [$14,000 – ($40,000 – $28,000)] 2,000 Equipment 40,000 Dec. 31 Depreciation Expense  5,000 Accumulated Depreciation—Equipment [($33,000 – $3,000) X 1/6] 5,000 31 Loss on Disposal of Plant Assets  8,000 Accumulated Depreciation—Equipment [($33,000 – $3,000) X 5/6] 25,000 Equipment 33,000 Top of Form Exercise 9-9 Your answer is correct. Presented below are selected transactions at Tomas Company for 2014. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $58,000 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a compute

1. ACC 557 Week 6 Chapter 9 (E9 9 E9 11 E9 12 P9 3A)
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Sample content
EXERCISE 9-9
Jan. 1 Accumulated Depreciation—Equipment 58,000
Equipment 58,000

2. June 30 Depreciation Expense 4,000
Accumulated Depreciation—Equipment
($40,000 X 1/5 X 6/12) 4,000
30 Cash 14,000
Accumulated Depreciation—Equipment
($40,000 X 3/5 = $24,000; $24,000 + $4,000) 28,000
Gain on Disposal of Plant Assets
[$14,000 – ($40,000 – $28,000)] 2,000
Equipment 40,000
Dec. 31 Depreciation Expense 5,000
Accumulated Depreciation—Equipment
[($33,000 – $3,000) X 1/6] 5,000
31 Loss on Disposal of Plant Assets 8,000
Accumulated Depreciation—Equipment
[($33,000 – $3,000) X 5/6] 25,000
Equipment 33,000
Top of Form
Exercise 9-9
Your answer is correct.

3. Presented below are selected transactions at Tomas Company for 2014.
Jan. 1
Retired a piece of machinery that was purchased on January 1, 2004. The
machine cost $58,000 on that date. It had a useful life of 10 years with no salvage
value.
June 30
Sold a computer that was purchased on January 1, 2011. The computer cost
$40,000. It had a useful life of 5 years with no salvage value. The computer was
sold for $14,000.
Dec. 31
Discarded a delivery truck that was purchased on January 1, 2010. The truck cost
$33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage
value.
Journalize all entries required on the above dates, including entries to update
depreciation, where applicable, on assets disposed of. Tomas Company uses
straight-line depreciation. (Assume depreciation is up to date as of December 31,
2013.) (Credit account titles are automatically indented when amount is entered.
Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1
June. 30
(To record current depreciation)

4. June. 30
(To record the sale of the Asset)
Dec. 31
(To record current depreciation)
Dec. 31
(To record the disposal of the truck)
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Bottom of Form
EXERCISE 9-11
(a) Dec. 31 Depletion Expense 108,000
Accumulated Depletion
(120,000 X $.90) 108,000
Cost (a) $720,000
Units estimated (b) 800,000 tons
Depletion cost per unit [(a) ÷ (b)] $0.90
(b) The costs pertaining to the unsold units are reported in current assets as
part of inventory (30,000 X $.90 = $27,000).
Top of Form
Exercise 9-11

5. On July 1, 2014, Sutton Inc. invested $720,000 in a mine estimated to have
800,000 tons of ore of uniform grade. During the last 6 months of 2014, 120,000
tons of ore were mined and sold.
(a)
Your answer is correct.
Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. $0.50.)
Depletion cost per unit
$
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