FREE Trial

On January 2, 2018, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625.

Question:

On January 2, 2018, Bering Co. disposes of a machine costing $44,000 with accumulated depreciation of $24,625. Prepare the entries to record the disposal under each of the following separate assumptions.

1. The machine is sold for $18,250 cash.

2. The machine is traded in for a newer machine having a $60,200 cash price. A $25,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.

3. The machine is traded in for a newer machine having a $60,200 cash price. A $15,000 trade-in allowance is received, and the balance is paid in cash. Assume the asset exchange has commercial substance.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 76% (13 reviews)

1 Sold for 18250 cash Jan2 Cash 18250 Loss on Sale of Machinery ...View the full answer


answer-question-section
Answered By
tutor-profile-image
Gaurav Soni
Teaching was always an area where I can pursue my passion. I used to teach my friends and junior during my school and college life. After completing my professional qualification (chartered accountancy) and before joining my job, I also joined an organization for teaching and guidance to my juniors. I had also written some articles during my internship which later got published. apart from that, I have also given some presentations on certain amendments/complex issues in various forms. Linkedin profile link: https://www.linkedin.com/in/gaurav-soni-38067110a
5.00+ 7+ Reviews 13+ Question Solved
Related Book For  book-img-for-question
Financial Accounting Information for Decisions

Financial Accounting Information for Decisions

ISBN: 978-1259917042

9th edition

Authors: John J. Wild

See More Books
Question Posted:
See More Questions

Related Video

Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

Students also viewed these Business questions

GEMS Cushies Ultra Soft Pocket Tissues 10 X Packs - ISBN: B08HX69CM9 - Free Book