Question

Diaz Company owns a machine that cost $126,500 and has accumulated depreciation of $91,600. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $15,500 cash. Diaz sold the machine for $34,900 cash. Diaz sold the machine for $40,400 cash.

Answer 1

S/n Account Titles and Explanation Debit Credit

1. Accumulated Dep - Machine Equipment $91,600

Loss on Disposal $34,900

Machine Equipment $126,500

(To record disposal)

2. Cash $17,500

Accumulated Dep - Machine Equipment $91,600

Loss on sale/disposal $17,400

Machine Equipment $126,500

(To record sale)

3 Cash $34,900

Accumulated Dep - Machine Equipment $91,600

Machine Equipment $126,500

(To record sale)

4 Cash $40,400

Accumulated Dep - Machine Equipment $91,600

Gain on sale/disposal $5,500

Machine Equipment $126,500

(To record sale)