PB9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Duri

Question

PB9-2 Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5]

During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

Machine B: On January 2, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.

Give the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

Record the current year depreciation for Machine A prior to disposal.

Record the disposal of Machine A.

Record the current year depreciation for Machine B prior to disposal.

Record the disposal of Machine B.

During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:

Explanation / Answer

Journal Entry S. No. Date Particulars Dr. Amt. Cr. Amt. 1 2-Jan No Entry 2 2-Jan Cash    34,900.00 Accumulated Depreciation - Equipment    21,300.00    Equipment    55,000.00    Gain on Sale of Machine      1,200.00 $34,900 - ($55,000 - $21,300) (To record the sale of Machine A) 3 2-Jan No Entry 4 2-Jan Accumulated Depreciation - Equipment      6,500.00 Loss on Disposal of Machine      9,100.00 $15,600 - $6,500    Equipment    15,600.00 (To record the disposal of Machine B)

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