2:38 AM ezto.mheducation.com on PA9-2 Recording and Interpreting the Disposal of

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2:38 AM ezto.mheducation.com on PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9. During 2013, Ly Company disposed of two different assets. On January 1, 2013, prior to their disposal, the accounts reflected the following Accumulated Depreciation Original Residual Estimated CostValue Machine A $30,000 $3,000 3,200 Life 5 years 14 years Asset $21,600 (4 years) Machine B 59,200 44,000 (11 years) The machines were disposed of in the following ways: a. Machine A: Sold on January 1, 2013, for $9,000 cash. b. Machine B: On January 1, 2013, this machine suffered ireparable damage from an accident and was removed immediately by a salvage company at no cost Required 1. Prepare the jounal entries related to the disposal of each machine at the beginning of 2013. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Machine A view general journal Journal Entry Worksheet Record 2013 depreciation for Machine A prior to disposal. January 01, 2013 Enter debits before credits

Explanation / Answer

Date Account Tiltles and Explanation Debit ($) Credit ($) Jan 1 , 2013 Cash a/c …………………………………..Dr              9,000 Accumulated depreciation a/c ….Dr            21,600                     To Machine A a/c              30,000                     To Gain on sale of fixed assets a/c                    600 (21600+9000-30000) (Being sale of Machine A) Jan 1 , 2013 Loss on sale of fixed assets a/c …..Dr            15,200 (59,200-44,000) Accumulated depreciation a/c ….Dr            44,000                     To Machine B a/c              59,200 (Being sale of Machine B)

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