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During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on January 1 of the current years, prior to the disposal of the assets: Original Residual Asset Machine A Machine B Machine C Cost $21,000 Value $3,000 50,000 4,000 Estimated Life 8 years 10 years 75,000 3,000 12 years Accumulated Depreciation (straight line) The machines were disposed of in the following ways: $15,750 (7 years) 36,800 (8 years) 60,000 (10 years) a. Machine A: Sold on January 1 of the current year for $5,000 cash. b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following year, plus 6 percent interest. c. Machine C: Suffered Irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no cost. The machine was insured, and $18,000 cash was collected from the Insurance company. Required: 1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.) Answer is not complete. No 1 date Jan. 1 General Journal No journal entry required Debit Credit 2 Jan. 1 Cash 5,000 → Accumulated depreciation, machine A 15,750 Loss on disposal of machine 250 → Equipment - Machine A 21,000 3 Apr. 1 Depreciation expense 1,150 Accumulated depreciation, machine B 1,150 Apr. 1 Cash 2,500 Note receivable 8,000 Accumulated depreciation, machine B 37,950 Loss on disposal of machine 1,750 x Equipment - Machine B 50,000 5 Jul. 2 Depreciation expense 3,000✔ Accumulated depreciation, machine C 3,000 6 Jul. 2 Cash 18,000 Accumulated depreciation, machine C 60,000 x Equipment - Machine C 75,000 x Gain on disposal of machine 3,000 x

During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on January 1 of the current years, prior to the disposal of the assets: Original Residual Asset Machine A Machine B Machine C Cost $21,000 Value $3,000 50,000 4,000 Estimated Life 8 years 10 years 75,000 3,000 12 years Accumulated Depreciation (straight line) The machines were disposed of in the following ways: $15,750 (7 years) 36,800 (8 years) 60,000 (10 years) a. Machine A: Sold on January 1 of the current year for $5,000 cash. b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following year, plus 6 percent interest. c. Machine C: Suffered Irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no cost. The machine was insured, and $18,000 cash was collected from the Insurance company. Required: 1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.) Answer is not complete. No 1 date Jan. 1 General Journal No journal entry required Debit Credit 2 Jan. 1 Cash 5,000 → Accumulated depreciation, machine A 15,750 Loss on disposal of machine 250 → Equipment - Machine A 21,000 3 Apr. 1 Depreciation expense 1,150 Accumulated depreciation, machine B 1,150 Apr. 1 Cash 2,500 Note receivable 8,000 Accumulated depreciation, machine B 37,950 Loss on disposal of machine 1,750 x Equipment - Machine B 50,000 5 Jul. 2 Depreciation expense 3,000✔ Accumulated depreciation, machine C 3,000 6 Jul. 2 Cash 18,000 Accumulated depreciation, machine C 60,000 x Equipment - Machine C 75,000 x Gain on disposal of machine 3,000 x

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 10RE: Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on...
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During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on January 1 of the current years, prior to the disposal of the assets: Original Residual Asset Machine A Machine B Machine C Cost $21,000 Value $3,000 50,000 4,000 Estimated Life 8 years 10 years 75,000 3,000 12 years Accumulated Depreciation (straight line) The machines were disposed of in the following ways: $15,750 (7 years) 36,800 (8 years) 60,000 (10 years) a. Machine A: Sold on January 1 of the current year for $5,000 cash. b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following year, plus 6 percent interest. c. Machine C: Suffered Irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no cost. The machine was insured, and $18,000 cash was collected from the Insurance company. Required: 1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.) Answer is not complete. No 1 date Jan. 1 General Journal No journal entry required Debit Credit 2 Jan. 1 Cash 5,000 → Accumulated depreciation, machine A 15,750 Loss on disposal of machine 250 → Equipment - Machine A 21,000 3 Apr. 1 Depreciation expense 1,150 Accumulated depreciation, machine B 1,150 Apr. 1 Cash 2,500 Note receivable 8,000 Accumulated depreciation, machine B 37,950 Loss on disposal of machine 1,750 x Equipment - Machine B 50,000 5 Jul. 2 Depreciation expense 3,000✔ Accumulated depreciation, machine C 3,000 6 Jul. 2 Cash 18,000 Accumulated depreciation, machine C 60,000 x Equipment - Machine C 75,000 x Gain on disposal of machine 3,000 x
Transcribed Image Text:During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on January 1 of the current years, prior to the disposal of the assets: Original Residual Asset Machine A Machine B Machine C Cost $21,000 Value $3,000 50,000 4,000 Estimated Life 8 years 10 years 75,000 3,000 12 years Accumulated Depreciation (straight line) The machines were disposed of in the following ways: $15,750 (7 years) 36,800 (8 years) 60,000 (10 years) a. Machine A: Sold on January 1 of the current year for $5,000 cash. b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following year, plus 6 percent interest. c. Machine C: Suffered Irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no cost. The machine was insured, and $18,000 cash was collected from the Insurance company. Required: 1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.) Answer is not complete. No 1 date Jan. 1 General Journal No journal entry required Debit Credit 2 Jan. 1 Cash 5,000 → Accumulated depreciation, machine A 15,750 Loss on disposal of machine 250 → Equipment - Machine A 21,000 3 Apr. 1 Depreciation expense 1,150 Accumulated depreciation, machine B 1,150 Apr. 1 Cash 2,500 Note receivable 8,000 Accumulated depreciation, machine B 37,950 Loss on disposal of machine 1,750 x Equipment - Machine B 50,000 5 Jul. 2 Depreciation expense 3,000✔ Accumulated depreciation, machine C 3,000 6 Jul. 2 Cash 18,000 Accumulated depreciation, machine C 60,000 x Equipment - Machine C 75,000 x Gain on disposal of machine 3,000 x
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