FUND FINCL ACCT (LL) W/CONNECT >IB<
5th Edition
ISBN: 9781260036138
Author: PHILLIPS
Publisher: MCG
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Chapter 9, Problem 2PA
Recording and Interpreting the Disposal of Long-Lived Assets
By Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
The machines were disposed of in the following ways:
- a. Machine A: Sold on January 1 for $9,000 cash.
- b. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost.
Required:
- 1. Give the
journal entry related to the disposal Machine A at the beginning of the current year. - 2. Give the journal entry related to the disposal of Machine B at the beginning of the current year.
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On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $238,400 and has accumulated depreciation of $214,560. Depreciation has been recorded up to the end of the year. Which of the following will be included in the journal entry for the disposal?
a. Loss on Disposal of Asset, debit, $214,560
b. Accumulated Depreciation, debit, $238,400
c. Gain on Disposal of Asset, credit, $23,840
d. Equipment, credit, $238,400
During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Asset
Original Cost
Residual Value
Estimated Life
Accumulated Depreciation (straight-line)
Machine A
$84,200
$9,000
15 years
$65,173
(13 years)
Machine B
28,000
3,600
8 years
18,300
(6 years)
The machines were disposed of in the following ways:
Machine A: Sold on January 2 for $28,000 cash.
Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
Required:
1. & 2. Prepare the journal entries related to the disposal of Machine A and B on the January 2 of the current year. TIP: When no cash is received on disposal, the loss on disposal will equal the book value of the asset at the time of disposal. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Asset
Original Cost
Residual Value
Estimated Life
Accumulated Depreciation (straight-line)
Machine A
$
35,000
$
3,800
6
years
$
26,000
(5 years)
Machine B
67,200
4,200
12
years
47,250
(9 years)
The machines were disposed of in the following ways:
Machine A: Sold on January 1 for $9,200 cash.
Machine B: On January 1, this machine was sold to a salvage company at zero proceeds (and zero cost of removal).
Required:
1. & 2. Prepare the journal entries related to the disposal of Machine A and B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Chapter 9 Solutions
FUND FINCL ACCT (LL) W/CONNECT >IB<
Ch. 9 - Define long-lived assets. What are the two common...Ch. 9 - Under the cost principle, what amounts should be...Ch. 9 - What is the term for recording costs as assets...Ch. 9 - 4. Waste Management, Inc., regularly incurs costs...Ch. 9 - Distinguish between ordinary repairs and...Ch. 9 - Describe the relationship between the expense...Ch. 9 - Why are different depreciation methods allowed?Ch. 9 - In computing depreciation, three values must be...Ch. 9 - Prob. 9QCh. 9 - After merging with Northwest Airlines, Delta...
Ch. 9 - A local politician claimed, to reduce the...Ch. 9 - What is an asset impairment? How is it accounted...Ch. 9 - What is book value? When equipment is sold for...Ch. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - FedEx Corporation reports the cost of its aircraft...Ch. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - (Supplement 9A) How does depletion affect the...Ch. 9 - (Supplement 9B) Over what period should an...Ch. 9 - Prob. 1MCCh. 9 - Prob. 2MCCh. 9 - Prob. 3MCCh. 9 - A company wishes to report the highest earnings...Ch. 9 - Barber, Inc., depreciates its building on a...Ch. 9 - Thornton Industries purchased a machine on July 1...Ch. 9 - ACME. Inc., uses straight-line depreciation for...Ch. 9 - What assets should be amortized using the...Ch. 9 - Prob. 9MCCh. 9 - The Simon Company and the Allen Company each...Ch. 9 - Classifying Long-Lived Assets and Related Cost...Ch. 9 - Prob. 2MECh. 9 - Prob. 3MECh. 9 - Computing Book Value (Straight-Line Depreciation)...Ch. 9 - Computing Book Value (Units-of-Production...Ch. 9 - Computing Book Value (Double-Declining-Balance...Ch. 9 - Calculating Partial-Year Depreciation Calculate...Ch. 9 - Recording Asset Impairment Losses After recording...Ch. 9 - Recording the Disposal of a Long-Lived Asset...Ch. 9 - Reporting and Recording the Disposal of a...Ch. 9 - Prob. 11MECh. 9 - Prob. 12MECh. 9 - Computing and Evaluating the Fixed Asset Turnover...Ch. 9 - (Supplement 9A) Recording Depletion for a Natural...Ch. 9 - Prob. 15MECh. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Determining Financial Statement Effects of an...Ch. 9 - Prob. 4ECh. 9 - Determining Financial Statement Effects of...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Prob. 8ECh. 9 - Demonstrating the Effect of Book Value on...Ch. 9 - Evaluating the Impact of Estimated Useful Lives of...Ch. 9 - Calculating the Impact of Estimated Useful Lives...Ch. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Computing and Interpreting the Fixed Asset...Ch. 9 - Computing Depreciation and Book Value for Two...Ch. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Prob. 2CPCh. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Prob. 3PACh. 9 - Prob. 4PACh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Prob. 4PBCh. 9 - Accounting for Operating Activities (Including...Ch. 9 - Prob. 1SDCCh. 9 - Prob. 2SDCCh. 9 - Ethical Decision Making: A Mini-Case Assume you...Ch. 9 - Critical Thinking: Analyzing the Effects of...Ch. 9 - Prob. 7SDCCh. 9 - Accounting for the Use and Disposal of Long-Lived...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.arrow_forwardPrepare journal entries for the following transactions: a. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was sold for 2,500. b. A machine with a cost of 10,000 and accumulated depreciation of 8,000 was traded for a new machine with a market value of 12,000. Cash of 9,500 was also paid.arrow_forwardWhich of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.arrow_forward
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