PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Ly C
ID: 2400480 • Letter: P
Question
PA9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following Accumulated Depreciation (straight-line) Residual Value $4,500 5,900 Estimated Life 6 years 14 years Original Asset Cost $28,750 (5 years) Machine A $39,000 Machine B 75,200 54,450 (11 years) The machines were disposed of in the following ways a. Machine A: Sold on January 1 for $11,000 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.)Explanation / Answer
Journal entry :
Date account & explanation debit credit Jan 02 No entry Jan 02 Cash 11000 Accumlated depreciation-Machine A 28750 Machine A 39000 Gain on disposal of Machine A 750 (To record machine A disposal) Jan 02 No entry Jan 02 Accumlated depreciation-Machine B 54450 Loss on disposal of machine B 20750 Machine B 75200 (To record machine B disposal)Related Questions
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