Ceda Co has equipment that cost 75700 and that has been depr

Ceda Co. has equipment that cost $75,700 and that has been depreciated $49,800. Record the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was sold for $22,200. (c) It was sold for $27,200. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

Solution

When the value is zero

Accumulated depreciation DR – 49800

Loss on sale of asset Dr             - 25900

Equipment Cr                               - 75700

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When the asset is sold for 22200, since the book value is 25900, there is a loss of 3700

Accumulated depreciation DR – 49800

Loss on sale of asset Dr              - 3700

Cash Dr                                          - 22200

Equipment Cr                               - 75700

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When the asset is sold or 27200, and the book value is 25900, there will be a gain of 1300

Accumulated depreciation DR – 49800

Cash Dr                                           - 27200

Gain on sale of asset Cr               - 1300

Equipment Cr                               - 75700

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Hope that helps.

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