Question

grouper Company has an old factory machine that cost $50,750. The machine has accumulated depreciation of $28,420. Grouper 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 Grouper make to record the sale of the machine for $25,375 cash

Answer 1

Accumulated depreciation $28,420 (debit)

Cash $25,375 (debit)

Profit and Loss $3,045 (credit)

Cost $50,750 (credit)

Step-by-step explanation:

For any sale of an Item of Property, Plant and Equipment, the sale must be accounted as follows :

1. De-recognize the Accumulated depreciation on the Asset
2. De-recognize the Cost of the Asset
3. Recognize the Proceeds of the Sale
4. Recognize the Profit or Loss on Sale of the asset (In this case there was a profit)