Sale of Plant Asset Raine Company has a machine that originally cost $72,000. De

Question

Sale of Plant Asset Raine Company has a machine that originally cost $72,000. Depreciation has been recorded for five years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected nine-year life. After recording depreciation at the end of the five years, Raine sells the machine. the journal entry to record the machine's sale for (Round to the nearest dollar): a $54,000 cash b. $37,000 cash c.$35,000 cash General Journal Date Description Debit Credit Accumulated Depreciation Equipment Gain on Sale of Piant Assets To record sale of machine. b. Cash To record sale of machine. c. Cosh Accumulated Deprediation- Equipment To record sale of machine.

Explanation / Answer

Accumulated depreciation on Equipment=(72000-9000)/9*5= $35000 a Cash 54000 Accumulated depreciation—Equipment 35000        Equipment 72000        Gain on sale of plant assets 17000 b Cash 37000 Accumulated depreciation—Equipment 35000        Equipment 72000 c Cash 35000 Accumulated depreciation—Equipment 35000 Loss on sale of plant assets 2000        Equipment 72000

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