Questions: Chapter 10 - Problem Assignment Diaz Company owns a machine that cost 126,200 and has accumulated depreciation of 93,400. Prepare the entry to record the disposal of the machine on January 1 in each separate situation. 1. The machine needed extensive repairs and was not worth repairing. Diaz disposed of the machine, receiving nothing in return. 2. Diaz sold the machine for 16,100 cash. 3. Diaz sold the machine for 32,800 cash. 4. Diaz sold the machine for 41,500 cash.

The journal entry to record the disposal of the machine with no return involves a loss of 32800, a credit to the machine account for 126200, and a credit to the accumulated depreciation for 93400.

The book value (BV) is calculated by subtracting the accumulated depreciation (D) from the original cost (C). $$BV = C - D = 126200 - 93400 = 32800$$

The sale price (S) is compared with the book value (BV) to determine if there is a gain or loss. $$Gain\ or\ Loss = S - BV = 16100 - 32800 = -16700$$

• Debit Cash for 16100
• Debit Accumulated Depreciation for 93400
• Debit Loss on Sale of Machine for 16700
• Credit Machine Account for 126200

The journal entry to record the sale of the machine involves debiting cash for 16100, debiting accumulated depreciation for 93400, debiting a loss account for 16700, and crediting the machine account for 126200.

The book value (BV) is calculated by subtracting the accumulated depreciation (D) from the original cost (C). $$BV = C - D = 126200 - 93400 = 32800$$

The sale price (S) is compared with the book value (BV) to determine if there is a gain or loss. $$Gain\ or\ Loss = S - BV = 32800 - 32800 = 0$$

• Debit Cash for 32800
• Debit Accumulated Depreciation for 93400
• Debit Loss on Sale of Machine for 0