Brief Exercise 115 Disposal of property plant and equipment

Brief Exercise 11-5 Disposal of property, plant, and equipment [L011-2 0.58 through the disposal date totaled $35,000. field.) Journal entry worksheet

Solution

1) wdv OF TRACTOR= cOST PRICE LESS DEPRECIATION=$(40800-35000)=$5800

SALE PRICE=$3900

SO LOSS ON SALE= $(5800-3900 ) = $1900

HENCE ENTRY ON SALE OF TRACTOR IN 2018 WILL BE

CASH A/C DR. 3900

LOSS ON SALE OF TRACTOR DR. 1900

TO TRACTOR 5800

CASE 2: SP=$12700

SO GAIN ON SALE= SELLING PRICE LESS WDV

=12700-5800

=$6900

CASH A/C DR. 12700

TO PROFIT ON SALE OF TRACTOR 6900

TO TRACTOR 5800