Sale of Plant Asset Raine Company has a machine that originally cost $72,000. Depreciation has been recorded for five years using the straight-line method, with a $9,000 estimated salvage value at the end of an expected nine-year life. After recording depreciation at the end of the five years, Raine sells the machine. the journal entry to record the machine’s sale for (Round to the nearest dollar): a. $54,000 cash b. $37,000 cash c. $35,000 cash General Journal Date Description Debit Credit a. Answer Answer Answer Accumulated Depreciation - Equipment Answer Answer Answer Answer Answer Gain on Sale of Plant Assets Answer Answer To record sale of machine. b. Cash Answer Answer Answer Answer Answer Answer Answer Answer To record sale of machine. c. Cash Answer Answer Answer Answer Answer Accumulated Depreciation - Equipment Answer Answer Answer Answer Answer To record sale of machine.
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.
Sale of Plant Asset
Raine Company has a machine that originally cost $72,000.
a. | $54,000 | cash |
b. | $37,000 | cash |
c. | $35,000 | cash |
General Journal | |||
---|---|---|---|
Date | Description | Debit | Credit |
a. | Answer | Answer | Answer |
Answer | Answer | ||
Answer | Answer | Answer | |
Gain on Sale of Plant Assets | Answer | Answer | |
To record sale of machine. | |||
b. | Cash | Answer | Answer |
Answer | Answer | Answer | |
Answer | Answer | Answer | |
To record sale of machine. | |||
c. | Cash | Answer | Answer |
Answer | Answer | Answer | |
Accumulated Depreciation - Equipment | Answer | Answer | |
Answer | Answer | Answer | |
To record sale of machine. |
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