Bramble Company has an old factory machine that cost $59,750.
The machine has accumulated depreciation of $33,460. Bramble has
decided to sell the machine. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the
amounts.)
| (a) | What entry would Bramble make to record the sale of the machine for $29,875 cash? | |
| (b) |
What entry would Bramble make to record the sale of the machine
for $17,925 cash? |
Homework Answers
a.
Cost of machine = $59,750
Accumulated depreciation = $33,460
Book value of machine = Cost of machine - Accumulated depreciation
= 59,750-33,460
= $26,290
Sale price of machine = $29,875
Gain on sale of machine = Sale price of machine - Book value of machine
= 29,875-26,290
= $3,585
Journal
| General Journal | Debit | Credit |
| Cash | $29,875 | |
| Accumulated depreciation - equipment | $33,460 | |
| Equipment | $59,750 | |
| Gain on sale of equipment | $3,585 |
b.
Sale price of machine = $17,925
Loss on sale of machine = Book value of machine - Sale price of machine
= 26,290-17,925
= $8,365
Journal
| General Journal | Debit | Credit |
| Cash | $17,925 | |
| Accumulated depreciation- equipment | $33,460 | |
| Loss on sale of equipment | $8,365 | |
| Equipment | $59,750 |
Kindly comment if you need further assistance. Thanks‼!
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