Question

During the current year, Merkley Company disposed of three different assets. On January 1 of the current year, prior to their disposal, the accounts reflected the following: OriginalResidual Estimated Depreciation Value 3,000 6 years Life Asset Machine A Machine B MachineC Cost straight line) 12,000 (4 years) 4,000 10 years 45,600 (8 years) 6,700 16 years 51,975 (12 ycars) 21,000 61,000 76,000 The machines were disposed of in the following ways: a. Machine A: Sold on January 1 for $8,500 cash. b. Machine B: Sold on December 31 for $10,300; received cash, $2100, and a $8,200 interest-bearing (12 percent) note receivable due at the end of 12 months. c. Machine C: On January 1, this machine suffered irreparable damage from an accident. On January 10, a salvage company removed the machine at no cost. value: 10.00 points Required 1. Give all joumal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Machine A Journal entry worksheet Record the disposal of Machine A. Note: Enter debits before credits ansaction General Journal Debit Credit Record entry View general journal Clear entry

Answer 1

		Asset	Original Cost	Residual Value	Estimated Life	Accumulated Depreciation	Accumulated Depreciation Years
		Machine A	21000	3000	6	12000	4
		Machine B	61000	4000	10	45600	8
		Machine C	76000	6700	16	51975	12
		Asset	Original Cost	Residual Value	Estimated Life	Depreciation PA
		Machine A	21000	3000	6	3000	(Original Cost-Residul Value)/Life
		Machine B	61000	4000	10	5700
		Machine C	76000	6700	16	4331.25
		Journal Entries for Disposal:
Machine A	01-Jan	Cash Account Dr.	8500
		Accumulated Depreciation Account Dr	12000
		Loss on Disposal Account Dr.	500
		To Machine A Account		21000
		(Being Sale recorded)
		Asset	Original Cost	Accumulated Depreciation	Book Value	Sales Value	(Loss)/Gain
		Machine A	21000	12000	9000	8500	-500
Machine B	31-Dec	Depreciation Account Dr.	5700
		To Accumulated Depreciation Account		5700
		(Being Depreciation recorded)
Machine B	31-Dec	Cash Account Dr.	2100
		12% Note Recieavble Account Dr.	8200
		Accumulated Depreciation Account Dr	51300
		To Profit on Disposal Account		600
		To Machine B Account		61000
		(Being Sale recorded)
		Asset	Original Cost	Accumulated Depreciation	Book Value	Sales Value	(Loss)/Gain
		Machine B	61000	51300	9700	10300	600
				(Incl Current Year)
Machine B	31-Dec	Accumulated Depreciation Account Dr	51975
		Loss on Disposal Account Dr.	24025
		To Machine C Account		76000
		(Being Disposal recorded)
		Asset	Original Cost	Accumulated Depreciation	Book Value	Sales Value	(Loss)/Gain
		Machine C	76000	51975	24025	0	-24025