UTSA Blut X ,m-SPRING R x ezto.mheducation.com/hm.tpx Bookmarks ESCI 111 Quiz 10

Question

UTSA Blut X ,m-SPRING R x ezto.mheducation.com/hm.tpx Bookmarks ESCI 111 Quiz 10 value 0.52 points CP9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Original Residual Estimated Life 15 years 8 years Depreciation (straight-line) $65,260 (13 years) 19,200 (6 years) Asset Cost Value Machine A S85,700 $10,400 Machine B 29,500 3,900 The machines were disposed of in the following ways: Machine A: Sold on January 2 for $29,500 cash. Machine B: On January 2, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost a. b. Required: 1. & 2. Prepare the journal entries related to the disposal of Machine A and B on January 2 of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) TIP: When no cash is received on disposal, the loss on disposal will equal the book value of the asset at the time of disposal. View transaction list X: Record the disposal of Machine A for $29,500 cash on January 2, 2014 1 2 Record the disposal of Machine B due to irreparable

Explanation / Answer

Date Accounting titles & Explanations Debit Credit A 2-Jan Cash 29,500 Accumulated Depreciation 65,260 Gain on disposal 9,060 Machine A 85,700 B Accumulated Depreciation 19,200 Loss on disposal 10,300 Machine B 29,500

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