Question

Diaz Company owns a milling machine that cost $126,900 and has accumulated depreciation of $94,800. Prepare the entry to record the disposal of the milling machine on January 3 in each of the following independent situations.

1. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return.
2. Diaz sold the machine for $16,100 cash.
3. Diaz sold the machine for $32,100 cash.
4. Diaz sold the machine for $41,200 cash.

Answer 1

Account Titles and Explanation	Debit	Credit
Accumulated depreciation	$94,800
Loss on disposal (plug)	$32,100
Machine		$126,900

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Account Titles and Explanation	Debit	Credit
Cash	$16,100
Accumulated depreciation	$94,800
Loss on sale (plug)	$16,000
Machine		$126,900

Account Titles and Explanation	Debit	Credit
Cash	$32,100
Accumulated depreciation	$94,800
Machine		$126,900

Account Titles and Explanation	Debit	Credit
Cash	$41,200
Accumulated depreciation	$94,800
Machine		$126,900
Gain on sale (plug)		$9,100