Sale of Plant Asset Raine Company has a machine that originally cost $75,000. Depreciation has been...
Sale of Plant Asset
Raine Company has a machine that originally cost $75,000. Depreciation has been recorded for five years using the straight-line method, with a $12,000 estimated salvage value at the end of an expected nine-year life. After recording depreciation at the end of five years, Raine sells the machine. Prepare the journal entry to record the machine’s sale for (Round to the nearest dollar):
| a. | $50,000 | cash |
| b. | $40,000 | cash |
| c. | $35,000 | cash |
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| a. | AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer |
| Accumulated Depreciation - Equipment | Answer | Answer | |
| AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer | |
| Gain on Sale of Plant Assets | Answer | Answer | |
| To record sale of machine. | |||
| b. | Cash | Answer | Answer |
| AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer | |
| AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer | |
| To record sale of machine. | |||
| c. | Cash | Answer | Answer |
| AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer | |
| Accumulated Depreciation - Equipment | Answer | Answer | |
| AnswerAccumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss | Answer | Answer | |
| To record sale of machine. | |||
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Sale of Plant Asset
Raine Company has a machine that originally cost $75,000.
Depreciation has been...
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Exercise 10-17 Partial-year depreciation; disposal of
plant asset LO P2
Rayya Co. purchases and installs a machine on January 1, 2017,
at a total cost of $176,400. Straight-line depreciation is taken
each year for four years assuming a eight-year life and no salvage
value. The machine is disposed of on July 1, 2021, during its fifth
year of service.
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