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During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Original Cost $76,200 Residual Value Estimated Life 15 years 20,000 8 years The machines were disposed of in the following ways: a. Machine A: Sold on January 2 for $20,000 cash. b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). Asset Machine A Machine B $4,200 2,000 Accumulated Depreciation (straight-line) $62,400 (13 years) 13,500 (6 years) 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.)

During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Original Cost $76,200 Residual Value Estimated Life 15 years 20,000 8 years The machines were disposed of in the following ways: a. Machine A: Sold on January 2 for $20,000 cash. b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). Asset Machine A Machine B $4,200 2,000 Accumulated Depreciation (straight-line) $62,400 (13 years) 13,500 (6 years) 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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Asset Machine A Machine B Original Cost Residual Value Estimated Life 15 years $76,200 20,000 8 years The machines were disposed of in the following ways: a. Machine A: Sold on January 2 for $20,000 cash. b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). View transaction list 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.) 1 Journal entry worksheet $4,200 2,000 2 Accumulated Depreciation (straight-line) $62,400 (13 years) 13,500 (6 years) Note: Enter debits before credits. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). Record the transaction. >
Transcribed Image Text:During the current year, Martinez Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Asset Machine A Machine B Original Cost Residual Value Estimated Life 15 years $76,200 20,000 8 years The machines were disposed of in the following ways: a. Machine A: Sold on January 2 for $20,000 cash. b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). View transaction list 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.) 1 Journal entry worksheet $4,200 2,000 2 Accumulated Depreciation (straight-line) $62,400 (13 years) 13,500 (6 years) Note: Enter debits before credits. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). Record the transaction. >
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