Homework Help is Here – Start Your Trial Now!
Business
Accounting
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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Topic Video
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 | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation (straight-line) | |------------|---------------|----------------|----------------|-----------------------------------------| | Machine A | $56,000 | $10,500 | 7 years | $26,000 (4 years) | | Machine B | $15,200 | $2,400 | 5 years | $7,680 (3 years) | **The machines were disposed of in the following ways:** - **Machine A:** Sold on January 2, for $34,500 cash. - **Machine B:** On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). **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 is required for a transaction/event, select "No Journal Entry Required" in the first account field.)* **Journal Entries:** 1. **No Journal Entry Required** 2. Date: January 02 - **Debit**: Cash $34,500 - **Debit**: Accumulated Depreciation-Equipment $26,000 - **Credit**: Gain on Disposal of PPE (Property, Plant, and Equipment) 3. **No Journal Entry Required** 4. Date: January 02 - **Credit**: Accumulated Depreciation-Equipment $7,680 - **Debit**: Loss on Disposal of PPE The table illustrates the transactions required for each machine's disposal. For Machine A, there is a cash receipt and recorded gain, while for Machine B, the accumulated depreciation is credited, and a loss is recorded, indicating the write-off.
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 | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation (straight-line) | |------------|---------------|----------------|----------------|-----------------------------------------| | Machine A | $56,000 | $10,500 | 7 years | $26,000 (4 years) | | Machine B | $15,200 | $2,400 | 5 years | $7,680 (3 years) | **The machines were disposed of in the following ways:** - **Machine A:** Sold on January 2, for $34,500 cash. - **Machine B:** On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). **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 is required for a transaction/event, select "No Journal Entry Required" in the first account field.)* **Journal Entries:** 1. **No Journal Entry Required** 2. Date: January 02 - **Debit**: Cash $34,500 - **Debit**: Accumulated Depreciation-Equipment $26,000 - **Credit**: Gain on Disposal of PPE (Property, Plant, and Equipment) 3. **No Journal Entry Required** 4. Date: January 02 - **Credit**: Accumulated Depreciation-Equipment $7,680 - **Debit**: Loss on Disposal of PPE The table illustrates the transactions required for each machine's disposal. For Machine A, there is a cash receipt and recorded gain, while for Machine B, the accumulated depreciation is credited, and a loss is recorded, indicating the write-off.
### Asset Disposal by Rayon Corporation During the current year, Rayon Corporation disposed of two different assets. On January 1, before their disposal, the accounts were as follows: #### Asset Information | Asset | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation | |-------------|---------------|----------------|----------------|--------------------------| | Machine A | $56,000 | $10,500 | 7 years | $26,000 (4 years) | | Machine B | $15,200 | $2,400 | 5 years | $7,680 (3 years) | #### Disposal Methods - **Machine A:** Sold on January 2, for $34,500 cash. - **Machine B:** On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). #### Required Journal Entries 1. Prepare the journal entries for the disposal of Machine A and Machine B on January 2 of the current year. If there is no entry required for a transaction/event, select "No Journal Entry Required." #### Journal Entries: - **Machine A Disposal** - **Entry 1**: No Journal Entry Required - **Entry 2**: - **Date:** January 02 - **General Journal:** - Cash: $34,500 (Debit) - Accumulated Depreciation-Equipment: $26,000 (Debit) - Gain on Disposal of PPE: [Amount not provided] (Credit) - **Machine B Disposal** - **Entry 3**: No Journal Entry Required - **Entry 4**: - **Date:** January 02 - **General Journal:** - Accumulated Depreciation-Equipment: $7,680 (Debit) - Loss on Disposal of PPE: [Amount not provided] (Credit) Note: The exact amounts for the gain or loss on disposal of PPE are not specified in the text provided. Ensure proper calculation based on the context for accurate reporting.
Transcribed Image Text:### Asset Disposal by Rayon Corporation During the current year, Rayon Corporation disposed of two different assets. On January 1, before their disposal, the accounts were as follows: #### Asset Information | Asset | Original Cost | Residual Value | Estimated Life | Accumulated Depreciation | |-------------|---------------|----------------|----------------|--------------------------| | Machine A | $56,000 | $10,500 | 7 years | $26,000 (4 years) | | Machine B | $15,200 | $2,400 | 5 years | $7,680 (3 years) | #### Disposal Methods - **Machine A:** Sold on January 2, for $34,500 cash. - **Machine B:** On January 2, this machine was scrapped with zero proceeds (and zero cost of removal). #### Required Journal Entries 1. Prepare the journal entries for the disposal of Machine A and Machine B on January 2 of the current year. If there is no entry required for a transaction/event, select "No Journal Entry Required." #### Journal Entries: - **Machine A Disposal** - **Entry 1**: No Journal Entry Required - **Entry 2**: - **Date:** January 02 - **General Journal:** - Cash: $34,500 (Debit) - Accumulated Depreciation-Equipment: $26,000 (Debit) - Gain on Disposal of PPE: [Amount not provided] (Credit) - **Machine B Disposal** - **Entry 3**: No Journal Entry Required - **Entry 4**: - **Date:** January 02 - **General Journal:** - Accumulated Depreciation-Equipment: $7,680 (Debit) - Loss on Disposal of PPE: [Amount not provided] (Credit) Note: The exact amounts for the gain or loss on disposal of PPE are not specified in the text provided. Ensure proper calculation based on the context for accurate reporting.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Depreciation Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS