During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Residual Value. $10,500 2,400 7 years 5 years The machines were disposed of in the following ways: Asset Machine A Machine B a. Machine A: Sold on January 2, for $34,500 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 Machine B on January 2 of the current year. (If no entry required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Original Cost $56,000 15,200 2 3 4 Estimated Life View Journal entry worksheet Date January 02 January 02 January 02 January 02 No Journal Entry Required Accumulated Depreciation (straight-line). $26,000 (4 years). 7,680 (3 years) General Journal Cash Accumulated Depreciation-Equipment Gain on Disposal of PPE No Journal Entry Required Accumulated Depreciation-Equipment Loss on Disposal of PPE Debit 34,500 26,000 7,680 Credit
During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Residual Value. $10,500 2,400 7 years 5 years The machines were disposed of in the following ways: Asset Machine A Machine B a. Machine A: Sold on January 2, for $34,500 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 Machine B on January 2 of the current year. (If no entry required for a transaction/event, select "No Journal Entry Required" in the first account field.) No 1 Original Cost $56,000 15,200 2 3 4 Estimated Life View Journal entry worksheet Date January 02 January 02 January 02 January 02 No Journal Entry Required Accumulated Depreciation (straight-line). $26,000 (4 years). 7,680 (3 years) General Journal Cash Accumulated Depreciation-Equipment Gain on Disposal of PPE No Journal Entry Required Accumulated Depreciation-Equipment Loss on Disposal of PPE Debit 34,500 26,000 7,680 Credit
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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Question
![During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts
reflected the following:
Asset
Machine A
Machine B
Original.
Cost
$56,000
15,200
The machines were disposed of in the following ways:
View transaction list
N
a. Machine A: Sold on January 2, for $34,500 cash.
b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
No
1
Required:
1.82. Prepare the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
2
3
4
Residual
Value.
$10,500
2,400
Date
January 02
Estimated
Life
View Journal entry worksheet
January 02
January 02
January 02
7 years
5 years.
No Journal Entry Required
Accumulated
Depreciation
(straight-line).
$26,000 (4 years)
7,680 (3 years)
General Journal
Cash
Accumulated Depreciation-Equipment
Gain on Disposal of PPE
No Journal Entry Required
Accumulated Depreciation-Equipment
Loss on Disposal of PPE
Debit
34,500
26,000
7,680
Credit
Ⓡ](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2b3f7f60-ea7d-412d-bfab-14e1e3d92302%2F0dff3aca-b721-4aa9-b42f-2d1f7c41141b%2Fmmuogor_processed.jpeg&w=3840&q=75)
Transcribed Image Text:During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts
reflected the following:
Asset
Machine A
Machine B
Original.
Cost
$56,000
15,200
The machines were disposed of in the following ways:
View transaction list
N
a. Machine A: Sold on January 2, for $34,500 cash.
b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
No
1
Required:
1.82. Prepare the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
2
3
4
Residual
Value.
$10,500
2,400
Date
January 02
Estimated
Life
View Journal entry worksheet
January 02
January 02
January 02
7 years
5 years.
No Journal Entry Required
Accumulated
Depreciation
(straight-line).
$26,000 (4 years)
7,680 (3 years)
General Journal
Cash
Accumulated Depreciation-Equipment
Gain on Disposal of PPE
No Journal Entry Required
Accumulated Depreciation-Equipment
Loss on Disposal of PPE
Debit
34,500
26,000
7,680
Credit
Ⓡ
![During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts
reflected the following:
Asset
Machine A
Machine B
No
The machines were disposed of in the following ways:
1
Original
Cost
$56,000
15,200
2
a. Machine A: Sold on January 2, for $34,500 cash.
b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
3
Required:
1.82. Prepare the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
4
Date
January 02
Residual
Value:
$10,500
2,400
January 02
Estimated
Life
January 02
7 years.
5 years
January 02
Answer is not complete.
Accumulated
Depreciation
(straight-line)
$26,000 (4 years)
7,680 (3 years)
General Journal
No Journal Entry Required
Cash
Accumulated Depreciation-Equipment
Gain on Disposal of PPE
No Journal Entry Required
Accumulated Depreciation-Equipment
Loss on Disposal of PPE
>
>>
>
>>
Debit
34,500
26,000
7,680
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2b3f7f60-ea7d-412d-bfab-14e1e3d92302%2F0dff3aca-b721-4aa9-b42f-2d1f7c41141b%2Ffgglz73_processed.jpeg&w=3840&q=75)
Transcribed Image Text:During the current year, Rayon Corporation disposed of two different assets. On January 1, prior to their disposal, the accounts
reflected the following:
Asset
Machine A
Machine B
No
The machines were disposed of in the following ways:
1
Original
Cost
$56,000
15,200
2
a. Machine A: Sold on January 2, for $34,500 cash.
b. Machine B: On January 2, this machine was scrapped with zero proceeds (and zero cost of removal).
3
Required:
1.82. Prepare the journal entries related to the disposal of Machine A and Machine B on January 2 of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
4
Date
January 02
Residual
Value:
$10,500
2,400
January 02
Estimated
Life
January 02
7 years.
5 years
January 02
Answer is not complete.
Accumulated
Depreciation
(straight-line)
$26,000 (4 years)
7,680 (3 years)
General Journal
No Journal Entry Required
Cash
Accumulated Depreciation-Equipment
Gain on Disposal of PPE
No Journal Entry Required
Accumulated Depreciation-Equipment
Loss on Disposal of PPE
>
>>
>
>>
Debit
34,500
26,000
7,680
Credit
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