PA9-2 (Algo) Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the followin Accumulated Depreciation (straight-line) $22,800 (4 years) $48,720 (12 years) Original Cost $32,000 5 years 64,200 15 years The machines were disposed of in the following ways: Asset Machine A Machine B Residual Value $3,500 3,300 Estimated Life a. Machine A: Sold on January 1 for $9,900 cash. b. Machine B: On January 1, this machine was scrapped with zero proceeds (and zero cost of removal).
PA9-2 (Algo) Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5] Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the followin Accumulated Depreciation (straight-line) $22,800 (4 years) $48,720 (12 years) Original Cost $32,000 5 years 64,200 15 years The machines were disposed of in the following ways: Asset Machine A Machine B Residual Value $3,500 3,300 Estimated Life a. Machine A: Sold on January 1 for $9,900 cash. b. Machine B: On January 1, this machine was scrapped with zero proceeds (and zero cost of removal).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Journal entry worksheet
Machine A: Sold on January 1 for $9,900 cash. Record the transaction.
Date
January 01
2
Note: Enter debits before credits.
Record entry
3
Cash
Accumulated Depreciation-Equipment
Equipment
Gain on Disposal of PPE
General Journal
Note: Enter debits before credits.
Record entry
Journal entry worksheet
Clear entry
4
Date
General Journal
January 01 Accumulated Depreciation-Equipment
Loss on Disposal of PPE
Equipment
Machine B: On January 1, this machine was scrapped with zero proceeds (and
zero cost of removal). Record the transaction.
Debit
Clear entry
9,900
View general journal
Credit
Debit
Credit
View general journal
>
![PA9-2 (Algo) Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5]
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Accumulated Depreciation
Original
Cost
$32,000
64,200
The machines were disposed of in the following ways:
Asset
Machine A
Machine B
Residual
Value
$3,500
3,300
View transaction list
Estimated
Life
5 years
15 years
a. Machine A: Sold on January 1 for $9,900 cash.
b. Machine B: On January 1, this machine was scrapped with zero proceeds (and zero cost of removal).
Journal entry worksheet
(straight-line)
$22,800 (4 years)
$48,720 (12 years)
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.)
Machine A: Sold on January 1 for $9,900 cash. Record the transaction.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb3ccf8-64a3-4f42-90b5-c9c7edf16923%2Feda38df0-4c48-4595-84ff-55b8ef6a3b38%2F41lzsbf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:PA9-2 (Algo) Recording and Interpreting the Disposal of Long-Lived Assets [LO 9-5]
Ly Company disposed of two different assets. On January 1, prior to their disposal, the accounts reflected the following:
Accumulated Depreciation
Original
Cost
$32,000
64,200
The machines were disposed of in the following ways:
Asset
Machine A
Machine B
Residual
Value
$3,500
3,300
View transaction list
Estimated
Life
5 years
15 years
a. Machine A: Sold on January 1 for $9,900 cash.
b. Machine B: On January 1, this machine was scrapped with zero proceeds (and zero cost of removal).
Journal entry worksheet
(straight-line)
$22,800 (4 years)
$48,720 (12 years)
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.)
Machine A: Sold on January 1 for $9,900 cash. Record the transaction.
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