Crane Company purchased machinery for $662400 on January 2, 2023. Straight-line depreciation has been recorded based on a $34200 salvage value and a 3-year useful life. The machinery was sold on March 2, 2025 at a gain of $10900. The journal entry to record the sale of the machinery will include a) a debit to Accumulated Depreciation - Equipment for $418800. b) a credit to Equipment for $208700. c) a credit to Gain on Disposal for $23300. d) a debit to Cash for $219600.
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.
Crane Company purchased machinery for $662400 on January 2, 2023. Straight-line
a) a debit to
b) a credit to Equipment for $208700.
c) a credit to Gain on Disposal for $23300.
d) a debit to Cash for $219600.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
