Marigold Company has an old factory machine that cost $61,750. The machine has a

Question

Marigold Company has an old factory machine that cost $61,750. The machine has accumulated depreciation of $34,580. Marigold has decided to sell the machine. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) What entry would Marigold make to record the sale of the machine for $30,875 cash? (b) What entry would Marigold make to record the sale of the machine for $18,525 cash?

Explanation / Answer

Book Value as on Date of Sale = Cost - accumulated depreciation

= $ 61,750 - $ 34,580

=$ 27,170

Journal

Account Titles and Explanation Debit Credit a. Cash $ 30,875 Accumulated Depreciation $ 34,580 Machine $ 61,750 Gain on Sale ( $ 61,750 - 30,875 - 34,580) $ 3,705 b. Cash $ 18,525 Accumulated Depreciation $ 34,580 Loss on Sale of Machine ( $ 61,750 - 18,525- 34,580) $ 8,645 Machine $ 61,750

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