Question

Short Exercise 9-6
Disposal of Plant Assets: No Trade-In

Times Printing owned a piece of equipment that cost $32,400 and on which it had recorded $18,000 of accumulated depreciation. The company disposed of the equipment on January 2, the first day of business of the current year.

1. Calculate the carrying value of the equipment.
$  

2. Calculate the gain or loss on the disposal under each of the following assumptions: (If required, use the minus sign to indicate a loss.)

a. The equipment was discarded as having no value.
$  

b. The equipment was sold for $6,000 cash.
$  

c. The equipment was sold for $16,000 cash.
$  

Answer 1

1)	Carrying value of the Equipment
	Orginal cost of Equipment				32,400
	less Accumulated depreciation				18,000
	Carrying value of the Equipment				14,400
2)	No	Account titles & Explanations				Debit	Credit
	a.	Accumulated Depreciation				18,000
		loss on disposal				14,400
		Equipment					32,400
	b.	Cash				6,000
		Accumulated Depreciation				18,000
		Loss on sale of Equipment				8,400
		Equipment					32,400
	c.	Cash				16,000
		Accumulated depreciation				18,000
		Gain on sale of Equipment					1,600
		Equipment					32,400