Lighting Company sold an old machine on December 31, 2009, for $32,000 cash. The

ID: 2416517 • Letter: L

Question

Lighting Company sold an old machine on December 31, 2009, for $32,000 cash. The following data was available when the equipment was sold:

When this transaction is recorded, it should include a

debit of $1,000 to the Loss on Disposal account

debit of $50,000 to the accumulated depreciation account

credit of $81,000 to the equipment account

credit of $1,000 to the Gain on Disposal account

Acquisition cost $85,000 Estimated residual value at time of acquisition 4,000 Accumulated depreciation on December 31, 2009, after adjustment 50,000

D) credit of $1000 to the gain on disposal account

explanation

Acquisition cost $85000

estimated residual value $4000

accumulated depreciation $35000

value of machinery $31000

sale value $32000

gain on sale $1000

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