SALE OF PLANT ASSET AT YEAR-END. Pacifica Manufacturing sold a com- w puterized metal stamping machine on December 31, 19x7. Pacifica transferred the par- a ticular stamping operations performed by the machine to another company and did not replace the machine. The following data are available for the machine:

The machine was sold for $188,000 cash.
REQUIRED:
. Compute accumulated depreciation on a straight-line basis at December 31, 19x’.
. Prepare the journal entry to record straight-line depreciation for 19x’.
. Prepare the journal entry to record the sale of the machine.
. Explain how the sale would be reported on the 19x7 income statement.

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Acquisition cost (installed), 1/1/x2 Residual value expected on 1/1/x2 Expected life, 1/1/x2 The machine was sold for $188,000 cash. $920,000 160,000 8 years