Diaz Company owns a machine that cost $125,500 and has accumulated depreciation of $93,000. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. 2. Diaz sold the machine for $17,500 cash. 3. Diaz sold the machine for $32,500 cash. 4. Diaz sold the machine for $41,600 cash. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 Jan 01 Cash Accumulated depreciation-Machine 93,000 Loss on disposal of machine 32,500 Machine 17,500

Diaz Company owns a machine that cost $125,500 and has accumulated depreciation of $93,000. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. 2. Diaz sold the machine for $17,500 cash. 3. Diaz sold the machine for $32,500 cash. 4. Diaz sold the machine for $41,600 cash. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 Jan 01 Cash Accumulated depreciation-Machine 93,000 Loss on disposal of machine 32,500 Machine 17,500

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter9: Long-term Assets: Fixed And Intangible

Section: Chapter Questions

Problem 9.5APR

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Effect of depreciation on net income Tuttle Construction Co. specializes in building replicas of historic houses. Tim Newman, president of Tuttle Construction, is considering the purchase of various items of equipment on July 1, 2014, for 400,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Tim is considering depreciating the equipment, by the straight-line method. He discussed the matter with his CPA and learned that, although the straight-line method could be elected, it was to his advantage to use the Modified Accelerated Cost Recovery System (MACKS) for tax purposes, lie asked for your advice as to which method to use for tax purposes. 1. Compute depreciation for each of the years (2014, 2015, 2016, 2017, 2018, and 2019) of useful life by (a) the straight-line method and (b) MACRS. In using the straight-line method, one-half year's depreciation should be computed for 2014 and 2019.Use the MACRS rates presented in Exhibit 9. 2. Assuming that income before depreciation and income tax is estimated to be 750,000 uniformly per year and that the income tax rate is 40%, compute the net income for each of the years 2014, 2015, 2016, 2017, 2018, and 2019 if (a) the straight-line method is used and (b) MACRS is used. 3. What factors would you present for Tim's consideration in the selection of a depreciation method?
Exercise 8-17 (Algo) Disposal of assets LO P2 Diaz Company owns a machine that cost $125,700 and has accumulated depreciation of $90,800. Prepare the entry to record the disposal of the machine on January 1 in each separate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return.2. Diaz sold the machine for $16,100 cash.3. Diaz sold the machine for $34,900 cash.4. Diaz sold the machine for $41,700 cash.
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Required information Problem 8-6A Disposal of plant assets LO C1, P1, P2 Onslow Co. purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $8,000 to wire electricity to the machine and an additional $1,600 to secure it in place. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.
Exercise 10-16 Disposal of assets LO P2 Diaz Company owns a machine that cost $126,900 and has accumulated depreciation of $91,300. Prepare the entry to record the disposal of the machine on January 1 in each seperate situation. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $17,000 cash. Diaz sold the machine for $35,600 cash. Diaz sold the machine for $40,100 cash.
Exercise 9-10Pryce Company owns equipment that cost $55,050 when purchased on January 1, 2012. It has been depreciated using the straight-line method based on estimated salvage value of $4,000 and an estimated useful life of 5 years. Prepare Pryce Company’s journal entries to record the sale of the equipment in these four independent situations. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g.125.) (a) Sold for $31,630 on January 1, 2015.(b) Sold for $31,630 on May 1, 2015.(c) Sold for $10,710 on January 1, 2015.(d) Sold for $10,710 on October 1, 2015. No.Account Titles and ExplanationDebitCredit(a) (b) (To record depreciation) (To record sale of equipment) (c) (d) (To record depreciation) (To record sale of equipment)
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7.14 Alpha sells machine B for $50,000 cash on 30 April 20X4. Machine B cost $100,000 when it was purchased and has a carrying value of $65,000 at the date of disposal. What are the journal entries to record the disposal of machine B? A Dr Accumulated depreciation $35,000 Dr Loss on disposal (SPL) $15,000 Dr Cash $50,000 Cr Non-current assets – cost $100,000 B Dr Accumulated depreciation $65,000 Dr Loss on disposal (SPL) $35,000 Cr Non-current assets – cost $100,000 C Dr Accumulated depreciation $35,000 Dr Cash $50,000 Cr Non-current assets $65,000 Cr Profit on disposal (SPL) $20,000 D Dr Non-current assets $65,000 Dr Accumulated depreciation $35,000 Cr Cash $50,000 Cr Profit on disposal (SPL) $50,000