The balance sheets of HiROE, Inc., showed the following at December 31, 2017, an
ID: 2396380 • Letter: T
Question
The balance sheets of HiROE, Inc., showed the following at December 31, 2017, and 2016:
The origial cost of equipment: $62,400
Bought on: July 1, 2014
c-2. Assume that this equipment account represents the cost of 10 identical machines. Prepare the journal entry for sale of the machine to calculate the gain or loss sale of one of the machines on January 2, 2018, for $3,900. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
December 31, 2017 December 31, 2016 Equipment, less accumulated depreciation of $27,300 at December 31, 2017, and $19,500 at December 31, 2016. $ 35,100 $ 42,900The origial cost of equipment: $62,400
Bought on: July 1, 2014
c-2. Assume that this equipment account represents the cost of 10 identical machines. Prepare the journal entry for sale of the machine to calculate the gain or loss sale of one of the machines on January 2, 2018, for $3,900. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Explanation / Answer
Cost of each machine = $62,400 / 10 = $6,240
Accumulated depreciation = $27,300 / 10 = $2,730
Book Value = $6,240 - $2,730 = $3,510
Profit on sale = $3,900 - $3,510 = $390
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Date General Journal Debit Credit 2 Jan. Cash $3,900 Accumulated Depreciation $2,730 Machine $6,240 Gain on sale of machine $390Related Questions
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