contestada

Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell the machine.

a) What entry would Bylie make to record the sale of the machine for $25,000 cash?

b) What entry would Bylie make to record the sale of the machine for $15,000 cash?

Respuesta :

Shahzaibfaraz

Answer:

A)

Cash                                                        $25000 Dr

Accumulated depreciation-Machine  $28000 Dr

               Machine                                       $50000 Cr

               Gain on disposal                          $3000 Cr

B)

Cash                                                        $15000 Dr

Accumulated depreciation-Machine  $28000 Dr

Loss on disposal                                    $7000 Dr

               Machine                                             $50000 Cr

Explanation:

The net book value of the machine is cost - accumulated depreciation.

Thus, the NBV = 50000 - 28000 = $22000

a. The gain on disposal = Cash received - NBV

Gain on disposal = 25000 - 22000 = $3000 gain

b. The gain on disposal = 15000 - 22000 = -$7000 (loss on disposal)

Otras preguntas