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Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following: Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line) Machine A $ 25,050 $ 2,300 5 years $ 18,200 (4 years) Machine B 65,600 3,350 15 years 53,950 (13 years) The machines were disposed of in the following ways: Machine A: This machine was sold on January 1 for $6, 140 cash. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Required: 1. Prepare the journal entries related to the disposal of each machine at the beginning of the current year. Transaction "a" relates to the recording of the depreciation, and transaction "b" relates to the recording of the disposal of the machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following: Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line) Machine A $ 25,050 $ 2,300 5 years $ 18,200 (4 years) Machine B 65,600 3,350 15 years 53,950 (13 years) The machines were disposed of in the following ways: Machine A: This machine was sold on January 1 for $6, 140 cash. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Required: 1. Prepare the journal entries related to the disposal of each machine at the beginning of the current year. Transaction "a" relates to the recording of the depreciation, and transaction "b" relates to the recording of the disposal of the machine. (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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Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following: Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line) Machine A $ 25,050 $ 2,300 5 years $ 18,200 (4 years) Machine B 65,600 3,350 15 years 53,950 (13 years) The machines were disposed of in the following ways: Machine A: This machine was sold on January 1 for $6, 140 cash. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Required: 1. Prepare the journal entries related to the disposal of each machine at the beginning of the current year. Transaction "a" relates to the recording of the depreciation, and transaction "b" relates to the recording of the disposal of the machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transcribed Image Text:Ly Company disposed of two different assets. On January 1, prior to disposal of the assets, the accounts reflected the following: Asset Original Cost Residual Value Estimated Life Accumulated Depreciation (straight-line) Machine A $ 25,050 $ 2,300 5 years $ 18,200 (4 years) Machine B 65,600 3,350 15 years 53,950 (13 years) The machines were disposed of in the following ways: Machine A: This machine was sold on January 1 for $6, 140 cash. Machine B: On January 1, this machine suffered irreparable damage from an accident and was removed immediately by a salvage company at no cost. Required: 1. Prepare the journal entries related to the disposal of each machine at the beginning of the current year. Transaction "a" relates to the recording of the depreciation, and transaction "b" relates to the recording of the disposal of the machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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