Question
In: Accounting
During 2017, Ly Company disposed of two different assets. On January 1, 2017, prior to disposal...
During 2017, Ly Company disposed of two different assets. On
January 1, 2017, prior to disposal of the assets, the accounts
reflected the following:
| Asset | Original Cost |
Residual Value |
Estimated Life |
Accumulated Depreciation (straight-line) |
||||||
| Machine A | $ | 36,000 | $ | 3,900 | 6 years | $ | 26,750 | (5 years) | ||
| Machine B | 68,500 | 4,150 | 13 years | 54,450 | (11 years) | |||||
The machines were disposed of in the following ways:
- Machine A: This machine was sold on January 1, 2017, for $8,220 cash.
- Machine B: On January 1, 2017, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.
Required:
1. Prepare the journal entries related to the disposal of
each machine at the beginning of 2017. Transaction “a” relates to
the recording of the 2017 depreciation and transaction “b” relates
to the recording of the disposal of the machine. (If no
entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
Machine A - Jan. 1, 2017:
Machine B - January 1, 2017:
2. Not available in Connect.
Solutions
Expert Solution
1.
| Date | General Journal | Debit | Credit |
| 1 Jan 2017 | Cash | 8220 | |
| Accumulated Depreciation - Machine A | 26750 | ||
| Loss on Sale of Machine A | 1030 | ||
| Machine A | 36000 | ||
| ( To record Sale of Machine A ) |
| Date | General Journal | Debit | Credit |
| 1 Jan 2017 | Accumulated Depreciation - Machine B | 54450 | |
| Loss on Disposal of Machine B | 14050 | ||
| Machine B | 68500 | ||
| ( To record Disposal of Machine B ) |
Note:
In both the assets case, Machines are sold or disposed in the beginning of the year , hence no depreciation provided . hence no journal entry required.
Loss on Sale of Machine A
| Cost of Machine A | 36000 |
| Less: Accumulated Depreciation | 26750 |
| Book Value of Machine A | 9250 |
| Less: Sale Value of Machine A | 8220 |
| Loss on Sale of Machine A | 1030 |
Loss on Disposal of Machine B
| Cost of Machine B | 68500 |
| Less: Accumulated Depreciation | 54450 |
| Loss on Disposal of Machine B | 14050 |
Using straight-line depreciation method = (Cost - Residual Value) / Useful life:
Machine A = ($36,000 - $3,900) / 6 years = $5350/year
$5350/year x 5 years = $26750
Machine B = ($68500 - $4150) / 13 years = $4950/year
$4950/year x 11 years = $ 54450
ekkarill92 answered 2 years agoRelated Solutions
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts...
Ly Company disposed of two different assets. On January 1, prior
to their disposal, the accounts reflected the following:
Asset
Original Cost
Residual Value
Estimated Life
Accumulated Depreciation (straight-line)
Machine A
$
32,000
$
3,200
5
years
$
23,040
(4 years)
Machine B
61,200
3,100
14
years
45,650
(11 years)
The machines were disposed of in the following ways:
Machine A: Sold on January 1 for $9,500 cash.
Machine B: On January 1, this machine was sold to a salvage...
During the current year, Merkley Company disposed of three different assets. On January 1 of the...
During the current year, Merkley Company disposed of three
different assets. On January 1 of the current year, prior to the
disposal of the assets, the accounts reflected the following:
Asset
Original
Cost
Residual
Value
Estimated
Life
Accumulated
Depreciation
(straight line)
Machine A
$
21,000
$
3,000
8 years
$
15,750 (7
years)
Machine B
50,000
4,000
10 years
36,800 (8
years)
Machine C
85,000
5,000
15 years
64,000 (12
years)
The machines were disposed of during the current year...
During the current year, Merkley Company disposed of three different assets. On January 1 of the...
During the current year, Merkley Company disposed of three
different assets. On January 1 of the current year, prior to their
disposal, the accounts reflected the following:
Asset
Original
Cost
Residual
Value
Estimated
Life
Accumulated
Depreciation
(straight line)
Machine A
$
36,000
$
3,000
10 years
$
26,400 (8
years)
Machine B
53,000
4,000
10 years
39,200 (8
years)
Machine C
75,200
5,200
16 years
52,500 (12
years)
The machines were disposed of in the following ways:
a. Machine...
I am looking to see how to determine the disposal of noncash assets. They were disposed...
I am looking to see how to determine the disposal of noncash
assets. They were disposed of for $160,000. The balance before was
$150,000. If I am doing a Proposal of Scheduled Liquidation -
Subsequent Save House Capital balances would I be putting $10,000
under cash, decrease noncash assets by $150,000 and allocation the
difference of $10,000 to the partners?
Topic: Revaluation and Disposal On January 1, 2018, Loony Co. acquired two assets within the same...
Topic: Revaluation and Disposal
On January 1, 2018, Loony Co. acquired two assets within the
same class of plant and equipment. Information on these assets is
as follows:
Cost
Useful life
Machine A
$3,000,000
5 years
Machine B
1,800,000
3 years
The machines are expected to generate benefits evenly over their
useful lives. The class of plant and equipment is measure using the
revaluation model.At December 31, 2018, information about the
assets is as follows:
Fair Value
Useful Life
Machine...
Liang Company began operations on January 1, 2017. During its first two years, the company completed...
Liang Company began operations on January 1, 2017. During its
first two years, the company completed a number of transactions
involving sales on credit, accounts receivable collections, and bad
debts. These transactions are summarized as follows.
2017
Sold $1,353,300 of merchandise (that had cost $977,400) on
credit, terms n/30.
Wrote off $18,200 of uncollectible accounts receivable.
Received $666,400 cash in payment of accounts receivable.
In adjusting the accounts on December 31, the company estimated
that 1.70% of accounts receivable will...
Liang Company began operations on January 1, 2017. During its first two years, the company completed...
Liang Company began operations on January 1, 2017. During its
first two years, the company completed a number of transactions
involving sales on credit, accounts receivable collections, and bad
debts. These transactions are summarized as follows.
2017
Sold $1,348,400 of merchandise (that had cost $984,500) on
credit, terms n/30.
Wrote off $18,400 of uncollectible accounts receivable.
Received $670,200 cash in payment of accounts
receivable.
In adjusting the accounts on December 31, the company
estimated that 1.30% of accounts receivable will...
Sunderland Company commenced business operations on January 1, 2017. During its first two years of operations,...
Sunderland Company commenced business operations on January 1,
2017. During its first two years of operations, the company
completed transactions involving sales on credit, accounts
receivable collections, and bad debts. On December 31, 2017, its
Accounts Receivable account and Allowance for Doubtful Accounts
account had a balance of $2,090,000 and $37,620 respectively. The
transactions for 2018 are summarized as follows.
a. Sold $2,845,000 of merchandise (that had cost $1,730,000) on
credit, terms n/30.
b. Wrote off $95,300 of uncollectible accounts...
(TANGIBLE ASSETS) On January 1, 2017, the Morgantown Company purchased equipment with an original cost of...
(TANGIBLE ASSETS) On January 1, 2017, the
Morgantown Company purchased equipment with an original cost of
$30,000. It estimates a 10 year-life with no salvage value. The
company uses straight-line depreciation method. However during year
3 (year 2020), Morgantown Company estimates that it will use the
machine for an additional 9 years.
Required: Compute the revised annual
depreciation and prepare the journal entries on December 31,
2020.
During the current year, Hitchcock Develops disposed of plant assets in the following transactions: Feb 10...
During the current year, Hitchcock Develops disposed of plant
assets in the following transactions:
Feb 10 Office equipment costing $24,000 was given to a scrap
dealer at no charge. At the date of disposal, accumulated
depreciation on the office equipment amounted to $21,800.
April 1 Hitchcock sold land and a building to Claypool
Associates for $900,000, receiving $100,000 cash and a five-year, 9
percent note receivable for the remaining balance. Hitchcock's
records showed the following amounts: Land, $50,000; Building,
$550,000;...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
ADVERTISEMENT