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AleksAgata [21]
3 years ago
10

Suppose a piece of plant equipment that PepsiCo put into service on January 1, 2014, at a total cost of $300,000 with an expecte

d useful life of 5 years and a salvage value of $60,000 is sold on June 30, 2018, for $60,000. The accumulated depreciation is $216,000.
What would the journal entry look like to record this sale?
Business
1 answer:
Iteru [2.4K]3 years ago
7 0

Answer:

Juen 30 2018 Cash                                                  $60000 Dr

                       Accumulated Depreciation              $216000 Dr

                       Loss on Disposal-Plant Equipment  $24000 Dr

                                   Plant Equipment                           $300000 Cr

Explanation:

The sale of an asset requires a firm to write off that asset from the books at cost. The writing off would require the credit to the asset account at cost along with a debit to the accumulated depreciation account that is created against this asset.

We also calculate the gain or loss on disposal of asset. An asset has a gain on disposal if the cash received from its sale is more than its carrying value and vice versa.

Carrying Value = Cost - Accumulated Depreciation

Carrying value = 300000 - 216000 = $84000

The asset loss on disposal = 60000 - 84000 = 24000 loss

We debit the loss on disposal and cash received from sale to complete the journal entry

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Correct question:

Correcting a market with an externality through taxation is _________ correcting it through a set output target from command and control.

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