Answer:
Marriott International
Journal Entries:
a. $300,000 cash
Debit Sale of Assets $8,000,000
Credit Furniture $8,000,000
To transfer the account to sale of assets account.
Debit Accumulated Depreciation $7,700,000
Credit Sale of Assets $7,700,000
To transfer the account to sale of assets account.
Cash $300,000
Sale of Assets $300,000
To record the cash receipts from the sale of assets.
No gain or loss on disposal.
b. $900,000 cash
Debit Sale of Assets $8,000,000
Credit Furniture $8,000,000
To transfer the account to sale of assets account.
Debit Accumulated Depreciation $7,700,000
Credit Sale of Assets $7,700,000
To transfer the account to sale of assets account.
Debit Cash $900,000
Credit Sale of Assets $900,000
To record the cash receipts from the sale of assets.
Sale of Assets $600,000
Gain on Disposal $600,000
To record the gain on the disposal of the furniture.
c. $100,000 cash
Debit Sale of Assets $8,000,000
Credit Furniture $8,000,000
To transfer the account to sale of assets account.
Debit Accumulated Depreciation $7,700,000
Credit Sale of Assets $7,700,000
To transfer the account to sale of assets account.
Debit Cash $100,000
Credit Sale of Assets $100,000
To record the cash receipts from the sale of assets.
Loss on Disposal $200,000
Sale of Assets $200,000
To record the loss on disposal of the furniture.
2. The disposal of an asset creates either a loss on disposal or a gain on disposal, which is normally regarded as a capital loss or a capital gain, as the case may be.
Explanation:
a) Data and Calculations:
Furniture (cost) ............................... $8,000,000
Accumulated depreciation .............. ...7,700,000
Net book value = $300,000
a. $300,000 cash
Sale of Assets $8,000,000
Furniture $8,000,000
Accumulated Depreciation $7,700,000
Sale of Assets $7,700,000
Cash $300,000
Sale of Assets $300,000
b. $900,000 cash
Sale of Assets $8,000,000
Furniture $8,000,000
Accumulated Depreciation $7,700,000
Sale of Assets $7,700,000
Cash $900,000
Sale of Assets $900,000
c. $100,000 cash
Sale of Assets $8,000,000
Furniture $8,000,000
Accumulated Depreciation $7,700,000
Sale of Assets $7,700,000
Cash $100,000
Sale of Assets $100,000
