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On December 31, Strike Company has decided to discard one of its batting cages. The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. The following will be included in the entry to record the disposal.

A. Accumulated Depreciation Dr. $310,000
B. Loss on Disposal of Asset Dr. $260,000
C. Equipment Cr. $310,000
D. Gain on Disposal of Asset Cr. $50,000

Respuesta :

Answer:

C. Equipment Cr. $310,000

Explanation:

Whenever there is sale of asset, then the entire asset is removed from balance sheet as it is no longer part of company's assets, thus the carrying balances related to such asset are then reversed.

For this in the given instance the carrying cost of $310,000 will be reversed from and equipment will be credited by $310,000

Also accumulated depreciation having credit balance will now be reversed and entry will include

Debit of accumulated depreciation = $260,000

Therefore, correct option is

C. Equipment Cr. $310,000

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