tb problem qu. 10 - 232 (algo) disposal of assets\na company sold equipment that had originally cost $77,200…
tb problem qu. 10 - 232 (algo) disposal of assets\na company sold equipment that had originally cost $77,200 for $31,100 cash. the accumulated depreciation as of the date of the sale was $41,000.\nprepare a single journal entry to record the sale of the equipment.\nview transaction list\njournal entry worksheet\na\nrecord the sale of the equipment.\nnote: enter debits before credits.\ntransaction general journal debit credit\n1
Answer
Explanation:
Step1: Calculate book - value of equipment
The book - value of the equipment is calculated as the original cost minus the accumulated depreciation. So, Book - value = Original cost - Accumulated depreciation = $77,200−$41,000 = $36,200.
Step2: Determine gain or loss on sale
The gain or loss on the sale is calculated as the cash received minus the book - value. Cash received = $31,100, Book - value = $36,200. Loss on sale = $31,100 - $36,200=-$5,100.
Step3: Record journal entry
When recording the sale of the equipment, we debit Cash for the amount received, debit Accumulated Depreciation to remove the accumulated depreciation of the asset, debit Loss on Sale of Equipment for the loss amount, and credit Equipment for the original cost of the asset.
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Cash | $31,100 | |
| Accumulated Depreciation - Equipment | $41,000 | ||
| Loss on Sale of Equipment | $5,100 | ||
| Equipment | $77,200 |
Answer:
| Transaction | General Journal | Debit | Credit |
|---|---|---|---|
| 1 | Cash | $31,100 | |
| Accumulated Depreciation - Equipment | $41,000 | ||
| Loss on Sale of Equipment | $5,100 | ||
| Equipment | $77,200 |