Journal requires 4 entries 1) Record current year depreciation for machine A pri

Question

Journal requires 4 entries

1) Record current year depreciation for machine A prior to disposal. 2) Machine A Sold on Jan 1. for 9500 cash. 3) Record current year depreciation for machine B prior to disposal. 4) On Jan 1, this machine suffered irrepairable damage from an accident and was removed immediately by a salvage company at no cost. Record the transaction.

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Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following Accumulated Depreciation (straight-line) Original Residual Value $3,200 3,100 Estimated Life 5 years 14 years Asset Cost $23,040 (4 years) Machine A $32,000 Machine B 61,200 45,650 (11 years) The machines were disposed of in the following ways a. Machine A: Sold on January 1 for $9,500 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

Account titles and explanation Debit credit 1 Current year depreciation on Machine A Depreciation expenses 5760 Accumulated depreciation 2 Sale of Machine A Cash 9500 Accumulated depreciation 28800 Machinery 32000 Profit on sale 6300 3 Current year depreciation on Machine B Depreciation expenses 4150 Accumulated depreciation 4150 4 Sale of machine B Accumulated depreciation `49800 Loss on removal 11400 Machine 61200

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