Question

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. Record the journal entries for the amount of gain or loss on disposal of the fixed asset. Be sure to show your work!

Answer 1

Answer:

Book value on date of sale = Cost - Accumulated depreciation

Book value on date of sale = $30,000 - $28,500

Book value on date of sale = $1,500

Gain on disposal = Sales amount - Book value on date of sale

Gain on disposal = $3,500 - $1,500

Gain on disposal = $2,000

                               Journal entries

Date  Account Titles                      Debit        Credit

Cash A/C                                        $3,500

Accumulated depreciation A/C    $28,500

      To fixed asset                                           $30,000

      To gain on disposal                                  $2,000.