Question

Diaz Company owns a milling machine that cost $126,200 and has accumulated depreciation of $91,400. Prepare the entry to record the disposal of the milling machine on January 3 In 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. Dlaz sold the machine for $17.200 cash. 3. Dlaz sold the machine for $34.800 cash. 4. Dlaz sold the machine for $40,200 cash. View transaction list Journal entry worksheet Record the disposal of the machine receiving nothing in return. Note: Enter debits before credits Debit Credit Date Jan 03 General Journal Loss on sale of milling machine Accumulated depreciation-Milling machine Milling machine Record entry Clear entry View general Journal

Answer 1

Solution:

Sl No.	Date	General Journal	Debit	Credit
1	Jan. 03	Accumulated Depreciation-Milling Machine	$            91,400
		Loss on Disposal of milling machine	$            34,800
		Milling Machine		$            126,200
		(To record disposal of machine)
2	Jan. 03	Cash	$            17,200
		Accumulated Depreciation-Milling Machine	$            91,400
		Loss on sale of milling machine	$            17,600
		Milling Machine		$            126,200
		(To record sale of machine)
3	Jan. 03	Cash	$            34,800
		Accumulated Depreciation-Milling Machine	$            91,400
		Milling Machine		$            126,200
		(To record sale of machine)
4	Jan. 03	Cash	$            40,200
		Accumulated Depreciation-Milling Machine	$            91,400
		Gain on sale of milling machine		$                 5,400
		Milling Machine		$            126,200
		(To record sale of machine)

Notes:

1) Balance of Gain/Loss on sale/disposal of milling machine is nothing but differences between debits and credits