Question

Diaz Company owns a machine that cost $126,200 and has accumulated depreciation of $92,500. Prepare the entry to record the disposal of the machine on January 1 in each seperate 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 $15,500 cash. 3. Diaz sold the machine for $33,700 cash. 4. Diaz sold the machine for $41,400 cash. View transaction list Journal entry worksheet Record the disposal of the machine receiving nothing in return Note: Enter debits before credits. Date General Journal Debit Credit Jan 01

Answer 1

Date Jan. 1 Credit General Journal Accumulated depreciation - Machine Loss on disposal of machine I Machine (To record lass on disposal of machine) Debit $92,500 $ 33,700 $ 126,200 $15,500 Jan 1 Cash Accumulated depreciation - Machine Loss on sale of machine $ 92,500 $ 18,200 $ 126,200 Machine (To record loss on sale of machine) Jan. 1 I Cash $ 33,700 Accumulated depreciation --Machine $ 92,500 Machine (To record accumulated depreciation $ 126,200 $ 41,400 Jani 1 Cash 7 Too $126, 200 Accumulated depreciation Machine $ 92,500 Grain on sale of machine Machine (To record gain on sale of machine) Calculation? Janet Lou on disposal of machine a Cost of machine - Accumulated depreciation - machine $ 126,200 - $92,500 $ 33,700 = =

Jan. 1 Loss on sale of machine = cost of machine - Cash - Accumulated depreciation $ 126,200 - $15,500 - $ 92,500 $ 18,200 = Jan. 1 Gain on sale of machine = Cost of machine - Cash - Accumulated depreciation = $126,200 - $ 41,400- $ 92,500 = $ 7,700