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CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 59P

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Question

What journal entry will Mason Builders record on these general accounting question?

Mason Builders purchased a crane for $85,000. The
accumulated depreciation on the crane is $80,000. The
company decides to discard the crane without receiving
any proceeds from its disposal. What journal entry will
Mason Builders record?
a. Loss on disposal, $5,000.
b. Gain on disposal, $5,000.
c. No gain or loss because it was discarded.
d. Loss of $85,000.

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