Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Accumulated Depreciation (straight-line) Original Cost $36,000 72,200 Residual Value Estimated Life $4,300 5 years $25,360 (4 years) 5,000 15 years $53,760 (12 years) The machines were disposed of in the following ways: Asset Machine A Machine B a. Machine A: Sold on January 1 for $11,000 cash. b. Machine B: On January 1, 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 B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Date Note: Enter debits before credits. 3 Record the current year depreciation for Machine A prior to disposal. 4 General Journal Debit Credit >
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following: Accumulated Depreciation (straight-line) Original Cost $36,000 72,200 Residual Value Estimated Life $4,300 5 years $25,360 (4 years) 5,000 15 years $53,760 (12 years) The machines were disposed of in the following ways: Asset Machine A Machine B a. Machine A: Sold on January 1 for $11,000 cash. b. Machine B: On January 1, 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 B at the beginning of the current year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Date Note: Enter debits before credits. 3 Record the current year depreciation for Machine A prior to disposal. 4 General Journal Debit Credit >
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.6E
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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
![Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Accumulated Depreciation
(straight-line)
Original
Cost
$36,000
72,200
Residual Value Estimated Life
$4,300
5 years
$25,360 (4 years)
5,000
15 years
$53,760 (12 years)
The machines were disposed of in the following ways:
Asset
Machine A
Machine B
a. Machine A: Sold on January 1 for $11,000 cash.
b. Machine B: On January 1, 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 B at the beginning of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
1
2
Date
Note: Enter debits before credits.
3
Record the current year depreciation for Machine A prior to disposal.
4
General Journal
Debit
Credit
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe1560fc4-c12a-4da4-b069-6c844e0f74d6%2Fb784a947-cf13-438d-b024-583d374b91e2%2Fxetu65c_processed.png&w=3840&q=75)
Transcribed Image Text:Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Accumulated Depreciation
(straight-line)
Original
Cost
$36,000
72,200
Residual Value Estimated Life
$4,300
5 years
$25,360 (4 years)
5,000
15 years
$53,760 (12 years)
The machines were disposed of in the following ways:
Asset
Machine A
Machine B
a. Machine A: Sold on January 1 for $11,000 cash.
b. Machine B: On January 1, 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 B at the beginning of the current year. (If no entry is
required for a transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
1
2
Date
Note: Enter debits before credits.
3
Record the current year depreciation for Machine A prior to disposal.
4
General Journal
Debit
Credit
>
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