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7 July, 23:20

A copy machine cost $ 36 comma 000$36,000 when new and has accumulated depreciation of $ 34 comma 000$34,000. Suppose Sun Graphics and Designs CenterSun Graphics and Designs Center junks this machine, receiving nothing in return. What is the result of the disposal transaction?

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  1. 8 July, 00:02
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    Loss of $2,000

    Explanation:

    As provided,

    Cost of machine in both cases = $36,000

    Accumulated depreciation = $34,000

    Therefore, carrying value = Cost - Accumulated depreciation = $36,000 - $34,000 = $2,000

    Now, since this asset is discarded as junk for $0, there will be a loss on such transaction to be recorded = $2,000

    This loss shall be reported in income statement as Debit.

    Further, after this transaction machine value in books shall be $0.

    Journal Entry for this will be:

    Loss on sale of Machinery A/c Dr. $2,000

    Accumulated Depreciation A/c Dr. $34,000

    To Machinery A/c $36,000
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Home » Business » A copy machine cost $ 36 comma 000$36,000 when new and has accumulated depreciation of $ 34 comma 000$34,000. Suppose Sun Graphics and Designs CenterSun Graphics and Designs Center junks this machine, receiving nothing in return.
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