mill creek golf club purchased equipment on january 1, 2025, for $48,000. suppose mill creek golf club sold…

mill creek golf club purchased equipment on january 1, 2025, for $48,000. suppose mill creek golf club sold the equipment for $33,000 on december 31, 2027. accumulated depreciation as of december 31, 2027, was $22,000. journalize the sale of the equipment, assuming straight - line depreciation was used\nfirst, calculate any gain or loss on the disposal of the equipment\nfair value of assets received\nless: book value of asset disposed of\ncost\nless: accumulated depreciation\ngain or (loss)

mill creek golf club purchased equipment on january 1, 2025, for $48,000. suppose mill creek golf club sold the equipment for $33,000 on december 31, 2027. accumulated depreciation as of december 31, 2027, was $22,000. journalize the sale of the equipment, assuming straight - line depreciation was used\nfirst, calculate any gain or loss on the disposal of the equipment\nfair value of assets received\nless: book value of asset disposed of\ncost\nless: accumulated depreciation\ngain or (loss)

Answer

Explanation:

Step1: Calculate fair value of assets received

The fair value of assets received is the selling price of the equipment, which is $33,000.

Step2: Calculate book value of asset disposed of

The cost of the equipment is $48,000 and the accumulated depreciation is $22,000. The book value of the asset = Cost - Accumulated Depreciation $$48000 - 22000=26000$$

Step3: Calculate gain or loss

Gain or Loss = Fair value of assets received - Book value of asset disposed of $$33000 - 26000 = 7000$$

Answer:

Fair value of assets received: $33,000 Cost: $48,000 Less Accumulated Depreciation: $22,000 Book value of asset disposed of: $26,000 Gain: $7,000

Journal entry: Debit Cash $33,000 Debit Accumulated Depreciation $22,000 Credit Equipment $48,000 Credit Gain on Disposal of Equipment $7,000