Question

Diaz Company owns a milling machine that cost $126,000 and has accumulated depreciation of $92,200. Prepare the entry to record the disposal of the milling machine on January 3 in each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $17,000 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $40,300 cash.

Answer 1

Answer:

Journal Entry

Explanation:

1 Accumulated Depreciation Dr,  $92,200

Loss on Disposal Dr,                             $34,400

     To  Machine Equipment                    $126,600

(Being disposal is recorded)

2. Cash Dr,                                      $17,000

Accumulated Depreciation Dr,     $92,200

Loss on sale/disposal Dr,             $17,400

       To  Machine Equipment            $126,600

(Being sale is recorded)

3. Cash Dr,                                   $34,400

Accumulated Depreciation Dr,     $92,200

  Machine Equipment                           $126,600

(Being sale is recorded)

4. Cash Dr,                                $40,300

Accumulated Depreciation Dr,   $92,200

  To Gain on sale/disposal                  $5,900

  To Machine Equipment                  $126,600

(Being sale is recorded)