Question

Sheridan Company has delivery equipment that cost $56,800 and has been depreciated $24,300.

Record entries for the disposal under the following assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a)		It was scrapped as having no value.
(b)		It was sold for $36,400.
(c)		It was sold for $19,600.

No.	Account Titles and Explanation	Debit	Credit
(a)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(b)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(c)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

Correct Answer:

1. equipment scrapped as having no value

General Journal	Debit	credit
Accumulated Deprecation	$ 24,300
Loss on Disposal	$ 32,500
Equipment		$ 56,800
(equipment scrapped as having no value)

2. equipment sold worth $ 36,400

General Journal	Debit	credit
Cash	$        36,400
Accumulated Deprecation	$        24,300
Equipment		$        56,800
Gain on sale of Equipment		$          3,900
(sale of equipment for $ 36400)

3. equipment sold for $ 19600.

General Journal	Debit	credit
Cash	$        19,600
Accumulated Deprecation	$        24,300
Loss on sale of Equipment	$        12,900
Equipment		$        56,800
(sale of equipment for $ 19600)

Calculation :

A	Loss on Disposal ( 56800 - 24300)	$        32,500
B	Gain on sale of equipment (( 36400 + 24300) -56800)	$          3,900
C	Loss on sale of Equipment (56800 - (19600 + 24300)	$        12,900