Disposal of Tangible Capital Asset}

Pacifica Manufacturing retired a computerized metal stamping machine on December 31, 2018. Pacifica sold the machine to another company and did not replace it. The following data are available for the machine:

The machine was sold for \(\$ 188,000\) cash. Pacifica uses the straight-line method of depreciation.
\section*{Required:}
1. Prepare the journal entry to record depreciation expense for 2018 .
2. Compute accumulated depreciation at December 31, 2018.
3. Prepare the journal entry to record the sale of the machine.
4. CONCEPTUAL CONNECTION Explain how the disposal of the tangible capital asset will affect the 2018 financial statements.
\section*{Exercise

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Cost (installed), 1/1/2013 Residual value estimated on 1/1/2013 Estimated life as of 1/1/2013 $920,000 160,000 10 years