Question

Presented below are selected transactions for Camren Products, Inc. for 2018.

Jan.     1     Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2007. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value.

April 30     Sold a machine for $28,000 that was purchased on January 1, 2015. The machine cost $75,000, and had a useful life of 5 years with no salvage value.

Dec. 31     Discarded a business automobile that was purchased on April 1, 2014. The car cost $32,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.

Required

In good form, journalize all entries required because of the above transactions. Camren Products, Inc. uses the straight-line method of depreciation and has recorded depreciation through December 31, 2017.

Answer 1

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	Efficient
	Journal Entries
Date	Account	Debit $	Credit $	Remarks
1-Jan	Cash	9,000.00
	Accumulated Depreciation- Machinery	90,000.00
	Machinery		90,000.00
	Gain on retirement		9,000.00
30-Apr	Cash	28,000.00
	Accumulated Depreciation- Machinery	45,000.00		This is $ 75,000/5 years *3 years
	Loss on retirement	2,000.00
	Machinery		75,000.00
31-Dec	Accumulated Depreciation- Automobile	28,500.00		This is ($ 32,000- 2,000)/5 years/ 12 months *57 months
	Loss on retirement	3,500.00
	Machinery		32,000.00