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.

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter2: Income Tax Concepts
Section: Chapter Questions
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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.
Transcribed Image Text: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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