Question
Sale of Plant Asset Raine Company has a machine that originally cost $60,000. Depreciation has been recorded for five years using the straight-line method, with
Sale of Plant Asset
Raine Company has a machine that originally cost $60,000. Depreciation has been recorded for five years using the straight-line method, with a $6,000 estimated salvage value at the end of an expected nine-year life. After recording depreciation at the end of five years, Raine sells the machine. Prepare the journal entry to record the machines sale for (Round to the nearest dollar):
| a. | $37,000 | cash |
| b. | $30,000 | cash |
| c. | $28,000 | cash |
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| a. | Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
|
| Accumulated Depreciation - Equipment |
|
| |
| Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
| |
| Gain on Sale of Plant Assets |
|
| |
| To record sale of machine. | |||
| b. | Cash |
|
|
| Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
| |
| Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
| |
| To record sale of machine. | |||
| c. | Cash |
|
|
| Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
| |
| Accumulated Depreciation - Equipment |
|
| |
| Accumulated Depreciation - EquipmentCashEquipmentGain on Sale of Plant AssetsLoss on Sale of Plant AssetsNet Loss
|
|
| |
| To record sale of machine. | |||
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An Introduction To Statistical Sampling In Auditing
Authors: Dan M. Guy
1st Edition
0471042323, 978-0471042327
