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Hawthorn Company purchased a piece of equipment for $35,000 and has accumulated depreciation of $30,000 at the end of the current year. The company decides to discard the equipment at the end of the current year. What is the journal entry for the disposal? O Accumulated Depreciation - Equipment 5,000 Loss on Disposal 30,000 Truck O Accumulated Depreciation - Equipment Gain on Disposal Truck O Accumulated Depreciation - Equipment Loss on Disposal Equipment O Equipment Gain on Disposal Accumulated Depreciation - Equipment 40,000 30,000 5,000 35,000 35,000 5,000 35,000 35,000 5,000 30,000

Hawthorn Company purchased a piece of equipment for $35,000 and has accumulated depreciation of $30,000 at the end of the current year. The company decides to discard the equipment at the end of the current year. What is the journal entry for the disposal? O Accumulated Depreciation - Equipment 5,000 Loss on Disposal 30,000 Truck O Accumulated Depreciation - Equipment Gain on Disposal Truck O Accumulated Depreciation - Equipment Loss on Disposal Equipment O Equipment Gain on Disposal Accumulated Depreciation - Equipment 40,000 30,000 5,000 35,000 35,000 5,000 35,000 35,000 5,000 30,000

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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Hawthorn Company purchased a piece of equipment for $35,000 and has accumulated depreciation of $30,000 at the end of the current year. The company decides to discard the equipment at the end of the current year. What is the journal entry for the disposal? Options: 1. - Accumulated Depreciation – Equipment: $5,000 - Loss on Disposal: $30,000 - Truck: $35,000 2. - Accumulated Depreciation – Equipment: $40,000 - Gain on Disposal: $5,000 - Truck: $35,000 3. - Accumulated Depreciation – Equipment: $30,000 - Loss on Disposal: $5,000 - Equipment: $35,000 4. - Equipment: $35,000 - Gain on Disposal: $5,000 - Accumulated Depreciation – Equipment: $30,000 **Explanation:** This text outlines a multiple-choice question focused on accounting for the disposal of equipment. Hawthorn Company needs to record the disposal of equipment worth $35,000 with accumulated depreciation of $30,000. Each option provides a different journal entry reflecting the accounting treatment for potential gains or losses on the disposal.
Transcribed Image Text:Hawthorn Company purchased a piece of equipment for $35,000 and has accumulated depreciation of $30,000 at the end of the current year. The company decides to discard the equipment at the end of the current year. What is the journal entry for the disposal? Options: 1. - Accumulated Depreciation – Equipment: $5,000 - Loss on Disposal: $30,000 - Truck: $35,000 2. - Accumulated Depreciation – Equipment: $40,000 - Gain on Disposal: $5,000 - Truck: $35,000 3. - Accumulated Depreciation – Equipment: $30,000 - Loss on Disposal: $5,000 - Equipment: $35,000 4. - Equipment: $35,000 - Gain on Disposal: $5,000 - Accumulated Depreciation – Equipment: $30,000 **Explanation:** This text outlines a multiple-choice question focused on accounting for the disposal of equipment. Hawthorn Company needs to record the disposal of equipment worth $35,000 with accumulated depreciation of $30,000. Each option provides a different journal entry reflecting the accounting treatment for potential gains or losses on the disposal.
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