Homework 6 st Length 20000 Question 10 6 points On June 30 2

Homework #6 st. Length: 2-00:00 Question 10 (6 points) On June 30, 2016, after adjusting entries were posted, Alpha Company sold a machine. The historical cost was $12,500 and the book value was $3,500. It was sold for $1,100 cash. Using this information, how much should be recorded on June 30 for the following accounts: 1. Accumulated Depreciation, Machine 2. Gain or (Loss) on Sale (Enter any loss amount with $ sign inside of brackets) 3. Machine 10 11 12 Quiz Started here to search

Solution

Accumulated Depreciation is the total amount of a plant asset’s cost that has been allocated to depreciation expense since the asset was put into service.So accumlated depreciation on Machine is Historical Value of Machine minus book value of machine. Therefore, Accumlated depreciation is 9000.

As the book value is higher than the sales price of the machine the company is selling the machine at loss. Loss on sale of machine is equal to book value minus sales price. Therefore, $3500-$1100 = ($2400).

As the machine is sold of therefore the machine value will become 0 and it will be written of from the books of accounts with a loss entry on sale of machine in the books of accounts .

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