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18 April, 11:49

Prepare journal entries to record these transactions. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a) Sandhill Co. retires its delivery equipment, which cost $49,500. Accumulated depreciation is also $49,500 on this delivery equipment. No salvage value is received.

b) Assume the same information as in part (a), except that accumulated depreciation for the equipment is $36,510 instead of 49,500.

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  1. 18 April, 14:17
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    a.

    Debit Accumulated depreciation account $49,500

    Credit Delivery equipment asset $49,500

    b.

    Debit Accumulated depreciation account $36,510

    Debit Loss on asset disposal $12,990

    Credit Delivery equipment asset $49,500

    Explanation:

    a. The cost of delivery equipment was $49,500 and its Accumulated depreciation is also $49,500 = > there is no gain or loss on the disposal.

    The entry is:

    Debit Accumulated depreciation account $49,500

    Credit Delivery equipment asset $49,500

    b.

    Calculating the carrying amount of the asset by using the original cost of the asset, minus all accumulated depreciation and any accumulated impairment charges: $49,500 - $36,510 = $12,990 > 0

    The company will record the loss on the disposal by the entry:

    Debit Accumulated depreciation account $36,510

    Debit Loss on asset disposal $12,990

    Credit Delivery equipment asset $49,500
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