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