Question

Diaz Company owns a machine that cost $127,000 and has accumulated depreciation of $94,600. Prepare the entry to record the

disposal of the machine on January 1 in each separate situation.

1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return.

2. Diaz sold the machine for $17,300 cash.

3. Diaz sold the machine for $32.400 cash

4. Diaz sold the machine for $40,300 cash

Answer 1

Answer #	Accounts title	Debit	Credit
1	Accumulated Depreciation - Machine Equipment	$94,600
	Loss on Disposal	$32,400
	Machine Equipment		$127,000
	(to record disposal)
2	Cash	$17,300
	Accumulated Depreciation - Machine Equipment	$94,600
	Loss on sale/disposal	$15,100
	Machine Equipment		$127,000
	(to record sale)
3	Cash	$32,400
	Accumulated Depreciation - Machine Equipment	$94,600
	Machine Equipment		$127,000
	(to record sale)
4	Cash	$40,300
	Accumulated Depreciation - Machine Equipment	$94,600
	Gain on sale/disposal		$7,900
	Machine Equipment		$127,000
	(to record sale)