scenario: eric’s electronics (ee) sells computer … Your question has been answered! Rate it below. Let us know if you got a helpful answer. . Question Scenario: Eric’s Electronics (EE) sells computer parts. You are the company accountant and have been charged with making several decisions regarding the company’s future. Part 3: 50% The company owns fixed assets and with the expansion it must determine whether assets should be replaced. You have been asked to provide the required financial information that will support the recommended course of action. Part 3 Eric’s Electronics is moving into new facilities and must determine whether it should retain or replace various fixed assets. Complete the analysis of each of the following transactions. 1. On March 19, 2007 the company purchased a diagnostic system for $197,000.The system has a useful life of 10 years and a residual value of $15,000.The company depreciates this asset using Double Declining Balance.On July 18, 2016 the company has an offer to sell the system for $19,000.Show the journal entry that would record this transaction. What would you recommend that the company do and why?
1 On March 19, 2007 the company purchased a diagnostic system for $197,000
useful life of 10
residual value of $15,000
Double Declining Balance.On July 18, 2016 the company has an offer to sell the system for $19,000
| Year | Depriciation | Book value | Accumulated depriciation |
| 2007 | 39400 | 157600 | 39400 |
| 2008 | 31520 | 126080 | 70650 |
| 2009 | 25216 | 100864 | 95866 |
| 2010 | 20172.8 | 80691.2 | 116038.8 |
| 2011 | 16138.24 | 64552.96 | 132177.04 |
| 2012 | 12910.593 | 51642.37 | 145087.63 |
| 2013 | 10328.47 | 41313.9 | 155416.1 |
| 2014 | 8262.78 | 33051.12 | 163678.8 |
| 2015 | 6610.22 | 26440.89 | 170289.1 |
| 2016 | 11710 | 15000 | 182000 |
following journal entry would record this transaction
| Number | Particular | Debit | Credit |
| 1 | Cash | 19000 | |
| Accumulated Depriciation | 182000 | ||
| Profit on sell of assets | 4000 | ||
| diagnostic system | 197000 |
Profit on sell of assets is as follow
sell the system for $19,000.
less :Salvage value $ 15000
Profit $ 4000
Recomandation
Company should sell the machine as there is profit on the sale of assets
