Question

Diaz Company owns a milling machine that cost $125,100 and has accumulated depreciation of $93,400. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations.

The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return.
Diaz sold the machine for $17,000 cash.
Diaz sold the machine for $31,700 cash.
Diaz sold the machine for $40,500 cash.

Answer 1

Answer:

Diaz sold the machine for $17,000 cash.

                                                 Dr.                Cr.

Cash                                         $17,000

Accumulated Depreciation     $93,400

Loss on Sale                             $14,700

Machinery (Asset)                                      $125,100

Diaz sold the machine for $31,700 cash.

                                                 Dr.                Cr.

Cash                                         $31,700

Accumulated Depreciation     $93,400

Machinery (Asset)                                      $125,100

Diaz sold the machine for $40,500 cash.

                                                 Dr.                Cr.

Cash                                         $40,500

Accumulated Depreciation     $93,400

Gain on sale                                               $8,800

Machinery (Asset)                                      $125,100

Explanation:

Diaz sold the machine for $17,000 cash.

Loss on Sale = 125,100 - 93,400 - 17,000 = -14,700

Diaz sold the machine for $31,700 cash.

Loss on Sale = 125,100 - 93,400 - 31,700 = 0

Diaz sold the machine for $40,500 cash.

Loss on Sale = 125,100 - 93,400 - 40,500 = 88,00