As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Inc. sold...

As part of a major renovation at the beginning of the year, Atiase Pharmaceuticals, Inc. sold shelving units (recorded as Equipment) that were 10 years old for $920 cash. The shelves originally cost $6,880 and had been depreciated on a straight-line basis over an estimated useful life of 10 years with an estimated residual value of $480.

Complete the table below, indicating the account, amount, and direction of the effect on disposal. Assume that depreciation has been recorded to the date of sale. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign. Do not round intermediate calculations.)
Prepare the journal entry to record the sale of the shelving units. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Expert Solution

	Answer

1	Cost of the asset	$ 6,880
	Less: Residual value	$ -480
	Depreciable value	$ 6,400
	Life of the asset	10 years
	Depreciation per year ($6,400/10)	$ 640
	Accumulated depreciation at 10th year ($640*10)	$ 6,400
	Book value of the asset ($6,880-$6,400)	$ 480
	Sale value	$ 920
	Gain on sale of assets ($920-$480)	$ 440

	Journal entry

2	Account Titles and Explanations	Debit	Credit
	Cash	$ 920
	Accumulated depreciation	$ 6,400
	To,Equipment		$ 6,880
	To,Gain on sale of assets		$ 440
	(To record the sale of equipment)

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