Sale of Plant Asset Raine Company has a machine that originally cost $78,000. De

Question

Sale of Plant Asset Raine Company has a machine that originally cost $78,000. Depreciation has been recorded for five years using the straight-line method, with a $15,000 estimated salvage value at the end of an expected nine-year life. After recording depreciation at the end of five years, Raine sells the machine. Prepare the journal entry to record the machine's sale for (Round to the nearest dollar): a. $48,000 cash b. $43,000 cash c. $30,000 cash General Journal Date Description Debit Credit Cash 48,000 0 30,000 Equipment 0 78,000 Gain on Sale of Plant Assets To record sale of machine. b. Csh To record sale of machine. c. Cash Accumulated Depreciation-Equipment To record sale of machine

Explanation / Answer

a Cash 48000 Accumulated depreciation-Equipment 35000 =(78000-15000)/9*5            Equipment 78000             Gain on sale 5000 b Cash 43000 Accumulated depreciation-Equipment 35000            Equipment 78000 c Cash 30000 Accumulated depreciation-Equipment 35000 Loss on sale 13000            Equipment 78000

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