Answered

Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Get detailed and accurate answers to your questions from a community of experts on our comprehensive Q&A platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Rayya company purchases a machine for $105000 on january 1, 2019. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2023, during its fifth year of service.

Required:
Prepare entries to record the partial year's depreciation on July 1, 2023 and to record the sale under each separate situation.

1. The machine is sold for $45,500 cash.
2. The machine is sold for $25,000 cash.

Sagot :

Tundexi

Answer:

                      Journal entry For Depreciation

Date        Account and explanation            Debit    Credit

July 1 Depreciation expense                 $7,500

                (105000/7)*6/12

                       Accumulated depreciation-Machine   $7,500

                 (To record Depreciation)

1)                     Journal entry

Date        Account and explanation                      Debit     Credit

July 1        Cash                                                     $45,500

                Accumulated depreciation-Machine  $67,500  

                        Machine                                                         $105,000

                        Gain on Sale of Machine                              $8,000

                (To record sale of Machine)  

2)                                 Journal entry

Date         Account and explanation                       Debit       Credit

July 1         Cash                                                      $25,000

                 Accumulated depreciation-Machine  $67,500

                  (105000/7*4.5)

                 Loss on sale of machine                      $12,500

                         Machine                                                            $105,000

                 (To record sale of Machine)

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.