On July 1, 2019, Osceola Company retired a metal stamping machine that it had originally purchased for $1,500,000. At December 31, 2018, the machine had a book value of $125,000 and was being depreciated on a straight-line basis at $75,000 per year. Osceola sold the machine for $200,000. Required: 1. Prepare any journal entries necessary to record the disposal of the machine. 2. How does the disposal of the machine affect the 2019 financial statements?
On July 1, 2019, Osceola Company retired a metal stamping machine that it had originally purchased for $1,500,000. At December 31, 2018, the machine had a book value of $125,000 and was being depreciated on a straight-line basis at $75,000 per year. Osceola sold the machine for $200,000. Required: 1. Prepare any journal entries necessary to record the disposal of the machine. 2. How does the disposal of the machine affect the 2019 financial statements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On July 1, 2019, Osceola Company retired a metal stamping machine that it had originally purchased for $1,500,000. At December 31, 2018, the machine had a book value of $125,000 and was being depreciated on a straight-line basis at $75,000 per year. Osceola sold the machine for $200,000.
Required:
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Prepare any |
2. How does the disposal of the machine affect the 2019 financial statements?
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Increase
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Decrease
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|---|---|---|---|
| Total Assets |
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| Shareholders’ equity |
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| Net income |
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