Plant Asset Disposal Auspelmyer Company bought a machine for $175,000 five years ago and was depreciating it on a straight-line basis over 12 years to a $25,000 salvage value. Calculate the gain or loss and record the journal entry to record the sale, if: a. The machine is sold for $115,000. b. The machine is sold for $100,000. c. The machine is sold for $112,500.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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**Plant Asset Disposal**

Auspelmyer Company purchased a machine for $175,000 five years ago and has been depreciating it on a straight-line basis over 12 years to a $25,000 salvage value.

Calculate the gain or loss and record the journal entry to record the sale, if:
a. The machine is sold for $115,000.
b. The machine is sold for $100,000.
c. The machine is sold for $112,500.
Transcribed Image Text:**Plant Asset Disposal** Auspelmyer Company purchased a machine for $175,000 five years ago and has been depreciating it on a straight-line basis over 12 years to a $25,000 salvage value. Calculate the gain or loss and record the journal entry to record the sale, if: a. The machine is sold for $115,000. b. The machine is sold for $100,000. c. The machine is sold for $112,500.
Expert Solution
Step 1: Introducing Depreciation Accounting

DEPRECIATION EXPENSE

Depreciation means gradual decrease in value of assets due to normal wear and tear, obsolescence.

In other word depreciation means the gradual diminution, loss or shrinkage in the utility value of assets due to wear & tear in use, effluxion of time or introduction of new technology in the market.

Method of Depreciation :

Straight Line Method

Double Declining Balance Method

Written Down Value Method

Units of Production Method

Sum of Years Digit Method


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