Question
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Asset Original Cost Residual Value Estimated
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: |
Asset | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation (straight-line) | |||||||
Machine A | $ | 30,000 | $ | 3,000 | 5 | years | $ | 21,600 | (4 years) | ||
Machine B | 59,200 | 3,200 | 14 | years | 44,000 | (11 years) | |||||
The machines were disposed of in the following ways: |
a. | Machine A: Sold on January 1 for $9,000 cash. |
b. | Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. |
Required: | ||
1. & 2 | Prepare the journal entry related to the disposal of Machine A and B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
First Journal Entry = Record the current year depreciation for Machine A prior to disposal. Second Journal Entry= Machine A: Sold on January 1 for $9,000 cash. Record the transaction Third Journal Entry= Record the current year depreciation for Machine B prior to disposal. Last Journal Entry= Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Record the transaction. |
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