A Company decides to get rid of a machinery (fixed asset) that it has been using for a while. The original cost of the asset was $150,000 and the asset has accumulated depreciation of $135,000 on the date of sale. Prepare 3 journal entries on your PDF (3 points each) considering the same asset and 3 different situations: a) Sell the asset for $20,000 cash b) Sell the asset for $10,000 cash c) Dispose of the asset with out selling for ash d) Which financial statement and what section do you expect to see a Gain or Loss from the disposition of this asset on? (1 point)
A Company decides to get rid of a machinery (fixed asset) that it has been using for a while. The original cost of the asset was $150,000 and the asset has accumulated depreciation of $135,000 on the date of sale. Prepare 3 journal entries on your PDF (3 points each) considering the same asset and 3 different situations: a) Sell the asset for $20,000 cash b) Sell the asset for $10,000 cash c) Dispose of the asset with out selling for ash d) Which financial statement and what section do you expect to see a Gain or Loss from the disposition of this asset on? (1 point)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![SALE OF FIXED ASSET
This is a different asset from KKAC!
A Company decides to get rid of a machinery (fixed asset) that it has been using for a
while.
The original cost of the asset was $150,000 and the asset has accumulated
depreciation of $135,000 on the date of sale.
Prepare 3 journal entries on your PDF (3 points each) considering the same asset and
3 different situations:
a) Sell the asset for $20,000 cash
b) Sell the asset for $10,000 cash
c) Dispose of the asset with out selling for cash
d) Which financial statement and what section do you expect to see a Gain or Loss
from the disposition of this asset on? (1 point)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F75227c3d-0045-449f-908c-0dff54e4e54b%2F1dbf3263-dcbd-4e19-b353-77d68e84da26%2Fof15fr9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:SALE OF FIXED ASSET
This is a different asset from KKAC!
A Company decides to get rid of a machinery (fixed asset) that it has been using for a
while.
The original cost of the asset was $150,000 and the asset has accumulated
depreciation of $135,000 on the date of sale.
Prepare 3 journal entries on your PDF (3 points each) considering the same asset and
3 different situations:
a) Sell the asset for $20,000 cash
b) Sell the asset for $10,000 cash
c) Dispose of the asset with out selling for cash
d) Which financial statement and what section do you expect to see a Gain or Loss
from the disposition of this asset on? (1 point)
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