Question

Brief Exercise 9-10 Cullumber Company sells equipment on September 30, 2019, for $16,000 cash. The equipment originally cost $71,000 and as of January 1, 2019, had accumulated depreciation of $41,000. Depreciation for the first 9 months of 2019 is $4,750. Prepare the journal entries to (a) update depreciation to September 30, 2019, and (b) record the sale of the equipment.

Answer 1

A. Dr Depreciation Expense $4,750

Cr Accumulated Depreciation $4,750

B. Dr Accumulated Depreciation $45,750

Dr Cash $16,000

Dr Loss on Disposal of Plant Assets 9,250

Cr Equipment $71,000

Step-by-step explanation:

A. Preparation of the journal entries to update depreciation to September 30, 2019

Dr Depreciation Expense $4,750

Cr Accumulated Depreciation $4,750

(Being to update depreciation )

B.Preparation of the journal entries to record the sale of the equipment

Dr Accumulated Depreciation $45,750

($41,000+$4,750)

Dr Cash $16,000

Dr Loss on Disposal of Plant Assets 9,250

($71,000-45,750-16,000)

Cr Equipment $71,000

(Being to record the sale of the equipment)