Residual Value $8,500 3,500 Estimated Life 15 years 8 years Accumulated Deprecia

Question

Residual Value $8,500 3,500 Estimated Life 15 years 8 years Accumulated Depreciation (straight-line) $65,173 (13 years) 18,000 (6 years) Original Asset Cost MachineA $83,700 Machine B 27,500 The machines were disposed of in the following ways a. Machine A: Sold on January 2 for $27,500 cash b. Machine B: On January 2, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. 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 Journal entry worksheet 2 Record the disposal of Machine A for $27,500 cash on January 2, 2014 Note: Enter debits before credits Date General Journal Debit Credit Jan 02 Record entry Clear entry View general journa

Explanation / Answer

Date General Journal Debit Credit Jan-02 Cash $27500 Accumulated depreciation $65173      Gain on disposal $8973       Equipment $83700 (to record sales of equipment) Jan-02 Accumulated depreciation $18000 Loss on disposal $9500     Equipment $27500 ( to record disposal of equipment due to accident) * There is no depreciation for the current year because disposal is done on beginning of the year

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