Homework SourseThe balance sheets of HiROE Inc showed the following at Dece
The balance sheets of HiROE, Inc., showed the following at December 31, 2017, and 2016:
The origial cost of equipment: $62,400
Bought on: July 1, 2014
c-2. Assume that this equipment account represents the cost of 10 identical machines. Prepare the journal entry for sale of the machine to calculate the gain or loss sale of one of the machines on January 2, 2018, for $3,900. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.)
| December 31, 2017 | December 31, 2016 | |||||
| Equipment, less accumulated depreciation of $27,300 at December 31, 2017, and $19,500 at December 31, 2016. | $ | 35,100 | $ | 42,900 | ||
| The origial cost of equipment: $62,400 Bought on: July 1, 2014 c-2. Assume that this equipment account represents the cost of 10 identical machines. Prepare the journal entry for sale of the machine to calculate the gain or loss sale of one of the machines on January 2, 2018, for $3,900. (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.) |
Solution
Cost of each machine = $62,400 / 10 = $6,240
Accumulated depreciation = $27,300 / 10 = $2,730
Book Value = $6,240 - $2,730 = $3,510
Profit on sale = $3,900 - $3,510 = $390
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| Date | General Journal | Debit | Credit |
| 2 Jan. | Cash | $3,900 | |
| Accumulated Depreciation | $2,730 | ||
| Machine | $6,240 | ||
| Gain on sale of machine | $390 |
