Question

Diaz Company owns a milling machine that cost $126,600 and has accumulated depreciation of $92,600. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations.
1. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return.

Record the disposal of the machine receiving nothing in return.

2. Diaz sold the machine for $17,500 cash.

Record the sale of the machine for $17,500 cash.

3. Diaz sold the machine for $34,000 cash.

Record the sale of the machine for $34,000 cash.

4. Diaz sold the machine for $40,900 cash.

Record the sale of the machine for $40,900 cash.

Answer 1

Answer:

Please see explanation

Explanation:

1.                                                                  Debit               Credit

Accumulated depreciation                      $92,600

Loss on disposal of machine                   $34,000

Machine                                                                                $126,600

2.

Cash                                                          $17,500

Accumulated depreciation                      $92,600

Loss on disposal of machine                   $16,500

Machine                                                                                $126,600

3.

Cash                                                          $34,000

Accumulated depreciation                      $92,600

Machine                                                                                $126,600

4.

Cash                                                          $40,900

Accumulated depreciation                      $92,600

Machine                                                                                $126,600

Gain on disposal of machine                                               $6,900