A vehicle which cost $45,000 and on which $31,000 of accumulated depreciation ha
ID: 2466308 • Letter: A
Question
A vehicle which cost $45,000 and on which $31,000 of accumulated depreciation had been recorded was disposed of on January 3, 2015. Calculate the amount of the gain or loss and write the journal entry necessary to record the disposal under each of the following independent assumptions: (4 points)
It was scrapped for no value.
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It was sold for $8,500.
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It was sold for $15,000
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Explanation / Answer
a) No Scrap Value Date Account Title Debit Credit 01-03-2015 Accumulated Depreciation 31000 Loss on sale of Asset 14000 To Machine Cost 45000 b) Scrap Value of $ 8,500 01-03-2015 Cash 8500 Accumulated Depreciation 31000 Loss on sale of Asset 5500 To Machine Cost 45000 c) Scrap Value of $ 15,000 01-03-2015 Cash 15000 Accumulated Depreciation 31000 To Gain on sale of asset 1000 To Machine Cost 45000