On January 5, 2011, Holstrom Co. disposes of a machine costing $41,600 with accu
ID: 2422637 • Letter: O
Question
On January 5, 2011, Holstrom Co. disposes of a machine costing $41,600 with accumulated depreciation of $22,410. Prepare the entries to record the disposal under each of the following separate assumptions.
The machine is traded in for a newer machine having an $58,100 cash price. A $14,857 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. (Omit the "$" sign in your response)
On January 5, 2011, Holstrom Co. disposes of a machine costing $41,600 with accumulated depreciation of $22,410. Prepare the entries to record the disposal under each of the following separate assumptions.
The machine is sold for $16,095 cash. (Omit the "$" sign in your response)Date General Journal Debit Credit
The machine is traded in for a newer machine having an $58,100 cash price. A $14,857 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance. (Omit the "$" sign in your response)
Date General Journal Debit Credit
Explanation / Answer
Answer:
5 Jan 2011 Cash A/C Dr. $16095
Accumulated dep A/C Dr. $22410
Loss on disposal of machine A/C $3095
To Machinery A/C $41600
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