19. Question worth 10 points Yellow Nehool hus Company had machinery that had or

Question

19. Question worth 10 points Yellow Nehool hus Company had machinery that had originally cost 5328 T he machinery was three years old and had been depreciated uning the over a five-year useful life with a residual value of $24,000 During the three y Answer each of the following independent questions: the dendble-declining balance methos ears Yellow correctly depreciated a total of S257.152. entry to record the If the company sold the machinery for $160,000, prepare a j B. What caused the income statement to be affected by this transaction? (Why did this happen?)

Explanation / Answer

Cost          328,000 Accumulated depreciation          257,152 WDV            70,848 Sale price          160,000 Gain on FA sale            89,152 Bank                      Dr          160,000 Accumulated Dep       Dr          257,152         To Fixed Asset    328,000         To Gain on FA sale      89,152 (Being asset sold and gain recorded) Solution B Since the sale price was higher than the written down value of asset, it resulted into gain and hence income staement is impacted

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