Smith\'s Auto YardSmith\'s Auto Yard purchased equipment on JanuaryJanuary ?1, 2

Question

Smith's Auto YardSmith's Auto Yard

purchased equipment on

JanuaryJanuary

?1,

20162016?,

for

$ 52 comma 000$52,000.

Suppose

Smith's Auto YardSmith's Auto Yard

sold the equipment for

$ 38 comma 000$38,000

on

December 31 comma 2017.December 31, 2017.

Accumulated Depreciation as of

DecemberDecember

?31,

20172017?,

was

$ 16 comma 000$16,000.

Journalize the sale of the? equipment, assuming? straight-line depreciation was used.

?First, calculate any gain or loss on the disposal of the equipment.

Market value of assets received

Less: Book value of asset disposed of

Cost

Less: Accumulated Depreciation

Gain or (Loss)

?Now, journalize the sale of the equipment. ?(Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.)

Date

Accounts and Explanation

Debit

Credit

Dec. 31

Market value of assets received

Less: Book value of asset disposed of

Cost

Less: Accumulated Depreciation

Gain or (Loss)

Explanation / Answer

calculate any gain or loss on the disposal of the equipment.

Journal entry :

Market value of assets received 38000 Less: Book value of asset disposed of Cost 52000 Less: Accumulated Depreciation -16000 -36000 Gain or (loss) 2000

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