During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following onJanuary 1 of the current years, prior to the disposal of the assets:Accumulated Depreciation(straight line)$15,750 (7 years)Original ResidualAssetMachine AMachine BMachine CCost$21,00050,000Value$3,0004,00075,0003,000EstimatedLife8 years10 years12 years36,800 (8 years)60,000 (10 years)The machines were disposed of in the following ways:a. Machine A: Sold on January 1 of the current year for $5,000 cash.b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the followingyear, plus 6 percent interest.c. Machine C: Suffered irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at nocost. The machine was insured, and $18,000 cash was collected from the insurance company.Required:1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.)

Original Residual Asset Cost ine A $21,000 Value $3,000 Estimated Life Accumulated Depreciation (straight line) 8 years $15,750 (7 years) ine B 50,000 4,000 10 years Fine C 75,000 3,000 12 years 36,800 (8 years) 60,000 (10 years) achines were disposed of in the following ways: chine A: Sold on January 1 of the current year for $5,000 cash. chine & Sold on April 1 for $10.500: received cash $2.500 and note receivable fo

Original Residual Asset Cost ine A $21,000 Value $3,000 Estimated Life Accumulated Depreciation (straight line) 8 years $15,750 (7 years) ine B 50,000 4,000 10 years Fine C 75,000 3,000 12 years 36,800 (8 years) 60,000 (10 years) achines were disposed of in the following ways: chine A: Sold on January 1 of the current year for $5,000 cash. chine & Sold on April 1 for $10.500: received cash $2.500 and note receivable fo

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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Question

During the current year, Fortini Company disposed of three different assets. The company's accounts reflected the following on
January 1 of the current years, prior to the disposal of the assets:
Accumulated Depreciation
(straight line)
$15,750 (7 years)
Original Residual
Asset
Machine A
Machine B
Machine C
Cost
$21,000
50,000
Value
$3,000
4,000
75,000
3,000
Estimated
Life
8 years
10 years
12 years
36,800 (8 years)
60,000 (10 years)
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1 of the current year for $5,000 cash.
b. Machine B. Sold on April 1 for $10,500; received cash, $2,500, and a note receivable for $8,000, due on March 31 of the following
year, plus 6 percent interest.
c. Machine C: Suffered irreparable damage from an accident on July 2. On July 10, a salvage company removed the machine at no
cost. The machine was insured, and $18,000 cash was collected from the insurance company.
Required:
1. Prepare all journal entries related to the disposal of each machine in the current year. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Round the final answer to nearest whole dollar.)

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