Morrell Corporation disposed of two computers at the end of their useful lives.

Question

Morrell Corporation disposed of two computers at the end of their useful lives. The computers had cost $4,720 and their Accumulated Depreciation was $4,720. No residual value was received.

Assume the same information as (a), except that Accumulated Depreciation, updated to the date of disposal, was $3,440.

Prepare journal entries to record above transactions

1. Record the disposal of computers that had cost $4,720 and their accumulated depreciation to the date of disposal was $4,720.

2. Record the disposal of computers that had cost $4,720 and their accumulated depreciation to the date of disposal was $3,440.

Explanation / Answer

Account title Dr Cr 1 Accumulated depreciation- computers $4,720 Computers $4,720 2 Accumulated depreciation- computers $3,440 Loss on Asset disposal $1,280 Computers $4,720

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