Question
During 2018, Ct Company disposed of three different assets. On January 1, 2018, prior to the disposal of the assets, the accounts reflected the following:
During 2018, Ct Company disposed of three different assets. On January 1, 2018, prior to the disposal of the assets, the accounts reflected the following: |
Asset | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation (straight line) | ||||||||
Machine A | $ | 20,000 | $ | 2,000 | 8 | years | $ | 13,500 | (6 years) | |||
Machine B | 41,000 | 4,000 | 10 | years | 29,600 | (8 years) | ||||||
Machine C | 75,000 | 3,000 | 12 | years | 60,000 | (10 years) | ||||||
The machines were disposed of in the following ways: | |
a. | Machine A: Sold on January 1, 2018, for $7,200 cash. |
b. | Machine B: Sold on April 1, 2018, for $8,500; received cash, $2,500, and a note receivable for $6,000, due on March 31, 2019, plus 6 percent interest. |
c. | Machine C: Suffered irreparable damage from an accident on July 2, 2018. On July 10, 2018, a salvage company removed the machine immediately at no cost. The machine was insured, and $18,000 cash was collected from the insurance company. |
Required: | |
1. | Prepare journal entries related to the depreciation expense and disposal for each machine in 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.) |
2. | Not available in Connect. |
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