Question

Exercise 10-16 Disposal of assets LO P2 Diaz Company owns a milling machine that cost $250,000 and has accumulated depreciation of $182,000. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. 1. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. 2. Diaz sold the machine for $35,000 cash. 3. Diaz sold the machine for $68,000 cash. 4. Diaz sold the machine for $80,000 cash. View transaction list Journal entry worksheet 2 3 4 Record the disposal of the machine receiving nothing in return. Note: Enter debits before credits Date General Journal Debit Credit Jan 03 Record entry Clear entry View general journal

Answer 1

1) Journal entry

Date	account and explanation	Debit	Credit
Jan 03	Accumulated depreciation-Machine	182000
	Loss on disposal of machine	68000
	Machine		250000
	(To record disposal of machine)

2) Journal entry

Date	account and explanation	Debit	Credit
Jan 03	Accumulated depreciation-Machine	182000
	Cash	35000
	Loss on disposal of machine	33000
	Machine		250000
	(To record disposal of machine)

3) Journal entry

Date	account and explanation	Debit	Credit
Jan 03	Accumulated depreciation-Machine	182000
	Cash	68000
	Machine		250000
	(To record disposal of machine)

4) Journal entry

Date	account and explanation	Debit	Credit
Jan 03	Accumulated depreciation-Machine	182000
	Cash	80000
	Gain on disposal of machine		12000
	Machine		250000
	(To record disposal of machine)