Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations: Disposal with no gain no loss : When the asset is disposed with no consideration received. Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation ). Disposal with loss: When the asset is disposed for less than its book value. Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the salvage value is shown as below: Depreciation cost = ( Cost of the asset-Salvage value ) Estimated useful life of the asset To record: the journal entry for the disposal of the asset

Question

Want to see the full answer?

Answer 1

Question

Chapter 9, Problem 9.3AP

To determine

Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:

Disposal with no gain no loss: When the asset is disposed with no consideration received.

Disposal with gain: When the asset is disposed for more than its book value (original cost less accumulated depreciation).

Disposal with loss: When the asset is disposed for less than its book value.

Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset. The formula to calculate the depreciation cost of the asset using the salvage value is shown as below:

Depreciation cost = (Cost of the asset-Salvage value)Estimated useful life of the asset

To record: the journal entry for the disposal of the asset

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

solve qn no. 3

Horngren's Financial & Managerial Accounting: The Managerial Chapters, 8th Edition. E-M:2-19 Accounting for job costs Brook Trailers’ job cost records yielded the following information: Job No. Date Total Cost of Job at July 31 Started Finished Sold 1 21-Jun 16-Jul 17-Jul $ 3,100 2 29-Jun 21-Jul 26-Jul 13,000 3 3-Jul 11-Aug 13-Aug 6,900 4 7-Jul 29-Jul 1-Aug 4,400 Use the dates in the table to identify the status of each job. Compute the following balances for Brook Trailers: a. Work-in-Process Inventory at July 31 b. Finished Goods Inventory at July 31 c. Cost of Goods Sold for July c. COGS $16,100

Donald Diesel owns the Fredonia Barber Shop. He employs 5 barbers and pays each a base salary of $1,380 per month. One of the barbers serves as the manager and receives an extra $535 per month. In addition to the base salary, each barber also receives a commission of $3.75 per haircut. Other costs are as follows. Advertising $270 per month Rent $1,010 per month Barber supplies $0.50 per haircut Utilities $160 per month plus $0.15 per haircut Magazines $35 per month Donald currently charges $11.00 per haircut. Compute the break-even point in sales units and in sales dollars. Break-even point Break-even point sales $ haircuts