Culver Company has an old factory machine that cost $64,500. The machine has accumulated depreciation of $36,120. Culver has decided to sell the machine. (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.)

(a) What entry would Culver make to record the sale of the machine for $32,250 cash?

(b) What entry would Culver make to record the sale of the machine for $19,350 cash?

Question

Business

Alisha Moody

18 October, 00:39

Culver Company has an old factory machine that cost $64,500. The machine has accumulated depreciation of $36,120. Culver has decided to sell the machine. (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.)

(a) What entry would Culver make to record the sale of the machine for $32,250 cash?

(b) What entry would Culver make to record the sale of the machine for $19,350 cash?

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Answers (1)

Know the Answer?

Kaylee Mcdowell · Answer 1

Answer: The machine cost 64,500 and has accumulated depreciation of 36,120 so the book value of the machine is (64,500-36,120) = 28380

The book value of the machine is 28380 so if the machine is sold for 32,250 then the gain on sale is (32,250-28380) = 3,870

Debit Credit

Cash 32,250

Machine 28,380

Gain on sale 3,870

If the machine is sold for 19,350 then there will be a loss on the sale of the machine and the loss will be debited. (28380-19350) = 9,030

Debit Credit

Cash 19,350

Loss on sale 9,030

Machine 28,380