Asset: Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue. Disposal of assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations: Disposal with no gain no loss : When the asset is disposed with no consideration received. Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation ). Disposal with loss: When the asset is disposed for less than its book value. To Prepare : The journal entries to record the sales of the patent and equipment.

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Chapter 11, Problem 11.6BE

To determine

Asset: Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue.

Disposal of assets:

Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

To Prepare: The journal entries to record the sales of the patent and equipment.

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