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Brown Company purchased equipment in 2011 for $150,000 and estimated a $10,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 2017, there was $98,000 in the Accumulated Depreciation account for this equipment using the straight-line method of depreciation. On March 31, 2018, the equipment was sold for $40,000.

Respuesta :

tanseershar

Answer:

The journal entry for disposal of equipment will be as follows;

Explanation:

Accumulated Depreciation          Dr.$98,000

Cash                                              Dr.$40,000

Loss on disposal (150-98-40)       Dr.$12,000

Equipment                                    Cr.$150,000

abiolataiwo2015

Answer:

Dr Depreciation Expense 3,500

Cr Accumulated Depreciation—Equipment 3,500

Dr Cash 40,000

Dr Loss on Disposal of Plant Assets 8,500

Dr Accumulated Depreciation—Equipment 101,500

Cr Equipment 150,000

Explanation:

Brown Company Journal entry

(a)

Dr Depreciation Expense 3,500

Cr Accumulated Depreciation—Equipment 3,500

( $14,000 × 1/4 = $3,500)

Dr Cash 40,000

Dr Loss on Disposal of Plant Assets 8,500

Dr Accumulated Depreciation—Equipment ($98,000 + $3,500) 101,500

Cr Equipment 150,000

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