Question

Blue Company has an old factory machine that cost $60,500. The machine has accumulated depreciation of $33,880. Blue has decided to sell the machine. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a) What entry would Blue make to record the sale of the machine for $30,250 cash?
(b) What entry would Blue make to record the sale of the machine for $18,150 cash?

Answer 1

Step-by-step explanation:

The journal entries are shown below:

(a) Cash A/c Dr $30,250

Accumulated depreciation A/c Dr $33,880

To Factory machine A/c $60,500

To Profit on sale of factory machine A/c $3,630

(Being the sale of machinery is recorded and the remaining balance is credited to the profit on sale of factory machine account)

(b) Cash A/c Dr $18,150

Loss on sale of factory machine A/c $8,470

Accumulated depreciation A/c Dr $33,880

To Factory machine A/c $60,500

(Being the sale of machinery is recorded and the remaining balance is debited to the loss on sale of factory machine account)