Question

A computer, with a cost of $10,000 is sold on July 1. Accumulated depreciation up to the date of sale is $5,000. Journalize the entries for the disposal of the computer under the following INDEPENDENT scenarios:

1.	The computer was sold for $6,000.

2.	The computer was sold for $1,000.

3.	The computer is obsolete and was junked.

Answer 1

Solution: 1
	CALCULATION OF GAIN OR LOSS ON SALE OF EQUIPMENT
	Cost of computer	$                      10,000
	Less: Accumulated Depreciation	$                        5,000
	Book Vale of the Compter (A)	$                        5,000
	Sale value of Computer (B)	$                        6,000
	Gain on Sale of Computer (B-A)	1,000
Date	Account Title and Explanation	Debit	Credit
July.01	Cash	$6,000
	Accumulated Depreciation - Computer	$5,000
	Computer		$10,000
	Gain on Sale of Computer		$1,000
	(To Record the sale of Computer)
Solution: 2
	CALCULATION OF GAIN OR LOSS ON SALE OF EQUIPMENT
	Cost of computer	$                      10,000
	Less: Accumulated Depreciation	$                        5,000
	Book Vale of the Compter (A)	$                        5,000
	Sale value of Computer (B)	$                        1,000
	Loss on Sale of Computer (B-A)	$                      (4,000)
Date	Account Title and Explanation	Debit	Credit
July.01	Cash	$1,000
	Accumulated Depreciation - Computer	$5,000
	Loss on Sale of Computer	$4,000
	Computer		$10,000
	(To Record the sale of Computer)
Solution: 3
	CALCULATION OF GAIN OR LOSS ON SALE OF EQUIPMENT
	Cost of computer	$                      10,000
	Less: Accumulated Depreciation	$                        5,000
	Book Vale of the Compter (A)	$                        5,000
	Sale value of Computer (B)	$                               -
	Loss on Sale of Computer	$                      (5,000)
Date	Account Title and Explanation	Debit	Credit
July.01	Accumulated Depreciation - Computer	$5,000
	Loss on Sale of Computer	$5,000
	Computer		$10,000
	(To Record the sale of Computer)