Ask Question
6 November, 15:44

Diaz Company owns a machine that cost $126,000 and has accumulated depreciation of $94,600. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation.

1. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return.

Record the disposal of the machine receiving nothing in return.

2. Diaz sold the machine for $17,500 cash.

Record the sale of the machine for $17,500 cash.

3. Diaz sold the machine for $34,000 cash.

Record the sale of the machine for $34,000 cash.

4. Diaz sold the machine for $40,900 cash.

Record the sale of the machine for $40,900 cash.

+2
Answers (1)
  1. 6 November, 16:28
    0
    See the explanation.

    Explanation:

    Requirement 1

    Accumulated depreciation Debit $94,600

    Loss on sale of machine Debit $31,400

    Machine Credit $126,000

    Note: To record the disposal of the machine. As the company did not receive anything after selling the machine, therefore, the company sold the machine at a loss of = $126,000 (Cost) - $94,600 (Accumulated depreciation) = $31,400.

    Requirement 2

    Cash Debit $17,500

    Accumulated depreciation Debit $94,600

    Loss on sale of machine Debit $13,900

    Machine Credit $126,000

    Note: To record the disposal of the machine. The company sold the machine for 17,500 cash after selling the machine. However, the company still faced a loss of = $126,000 (Cost) - $94,600 (Accumulated depreciation) - $17,500 (Cash) = $13,900.

    Requirement 3

    Cash Debit $34,000

    Accumulated depreciation Debit $94,600

    Gain on sale of machine Credit $2,600

    Machine Credit $126,000

    Note: To record the disposal of the machine. The company sold the machine for $34,000 cash after selling the machine. In this case the company make a profit after selling the machine = $94,600 (Accumulated depreciation) + $34,000 (Cash) - $126,000 (Cost) = $2,600.

    Requirement 4

    Cash Debit $40,900

    Accumulated depreciation Debit $94,600

    Gain on sale of machine Credit $9,500

    Machine Credit $126,000

    Note: To record the disposal of the machine. The company sold the machine for $34,000 cash after selling the machine. In this case the company make a profit after selling the machine = $94,600 (Accumulated depreciation) + 40,900 (Cash) - $126,000 (Cost) = $$9,500.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Diaz Company owns a machine that cost $126,000 and has accumulated depreciation of $94,600. Prepare the entry to record the disposal of the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers