acctg -8 account for asset disposal

disposal of plant assets occur in one of three basic ways

- discarding - sale - exchange

Sangmoon Co. sells equipment for $1,000 cash. The equipment cost Sangmoon $6,500 and is fully depreciated at the time of sale and has no salvage value. Sangmoon will record the sale with a credit to which account and for how much? Multiple choice question. Equipment for $1,000. Gain on Sale of Equipment for $1,000. Equipment for $5,500. Loss on Sale of Equipment for $1,000. Gain on Sale of Equipment for $5,500. Loss on Sale of Equipment for $5,500.

Gain on Sale of Equipment for $1,000.

On December 31, Briar Co. disposed of a piece of equipment that cost $6,000 with accumulated depreciation of $4,500. The entry to record this disposal would include a debit to which account and for how much?

Loss on Disposal of Equipment for $1,500

Martinez Co. sells a machine that cost $10,000 with accumulated depreciation of $8,000 for $2,000 cash. The entry to record this transaction will recognize a gain or loss of how much?

There is no gain or loss.

On December 29, 2021, Patel Products, Incorporated, sells a delivery van that cost $20,000. The equipment had accumulated depreciation of $16,000 at December 31, 2020. Annual depreciation on this equipment is $2,000 computed using straight-line depreciation. Complete the necessary journal entry to bring the accumulated depreciation up-to-date by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

depreciation expense 2000 accumulated depreciation 2000

A delivery van that cost $45,000 with accumulated depreciation of $15,000 is sold for $20,000. How much gain or loss will be recognized on this sale? Multiple choice question.

$10000 - make sure to find the difference of what has been used up already before calculating how much they are loosing or gaining. The accumulated depreciation shows you how much of the asset has been used up already so the buyer does not loose or gain money what has already been used

Which of the following situations will result in recognizing a gain on sale of a plant asset?

A fully depreciated asset is discarded. An asset with book value of $2,000 is sold for $2,000. An asset with a book value of $2,000 is sold for $1,500. An asset that cost $5,000 with accumulated depreciation of $3,000 is sold for $1,500. A fully depreciated asset is sold for $1,000. last answer is the correct one

Ironworks Co. sells a machine that cost $5,000 with a current book value of $1,500 for $2,000 cash. Ironworks will record a debit to which account and for how much? Multiple choice question. Accumulated Depreciation - Equipment for $1,500 Accumulated Depreciation - Equipment for $3,500 Equipment for $3,500 Equipment for $5,000

Accumulated Depreciation - Equipment for $3,500

A company sells a machine that cost $7,000 for $500 cash. The machine had $6,500 accumulated depreciation. The entry to record this transaction will include which of the following entries? (Check all that apply.) Multiple select question.

Credit to Accumulated Depreciation - Machinery for $6,500. Debit to Cash for $500. Credit to Gain on Sale of Machinery for $500. Debit to Loss on Sale of Machinery for $500. Credit to Machinery for $7,000. Debit to Accumulated Depreciation - Machinery for $6,500. Debit to Machinery for $7,000. Credit to Cash for $500. correct answers are numbers 2,5 & 6

A company owns an asset that is fully depreciated. The asset is no longer being used in operations and has no market value. The company has decided to ________ the asset by recording an entry to remove it from the balance sheet.

discard

On January 2, Dixie, Incorporated, pays a salvage company $1,000 to haul away a machine costing $28,000 with accumulated depreciation of $28,000. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

dr accumulated depreciation 28000 dr loss on disposal of machinery 1000 machinery 28000 cash 1000

On December 29, Patel Products, Incorporated, sells a delivery van that cost $20,000. After recording the entry to bring the accumulated depreciation up-to-date, the delivery van had accumulated depreciation of $18,000. Patel received $2,000 cash from the purchaser of the delivery van. Complete the necessary journal entry to record the sale by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.

dr cash 2000 dr accumulated depreciation 18000 cr delivery van 20000

when accumulated depreciation equals the assets costs, it is said to be

fully depreciated

a plant asset is discarded when

it is no longer useful to the company and it has no market value

A plant asset is (depreciated/discarded/obsolete)

when it is no longer useful to the company, and it has no market value.