In: Accounting
Ceda Co. has equipment that cost $75,700 and that has been depreciated $49,800. Record the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was sold for $22,200. (c) It was sold for $27,200. (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.)
When the value is zero
Accumulated depreciation DR – 49800
Loss on sale of asset Dr - 25900
Equipment Cr - 75700
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When the asset is sold for 22200, since the book value is 25900, there is a loss of 3700
Accumulated depreciation DR – 49800
Loss on sale of asset Dr - 3700
Cash Dr - 22200
Equipment Cr - 75700
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When the asset is sold or 27200, and the book value is 25900, there will be a gain of 1300
Accumulated depreciation DR – 49800
Cash Dr - 27200
Gain on sale of asset Cr - 1300
Equipment Cr - 75700
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