Ask Question
25 March, 17:06

Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell the machine.

a) What entry would Bylie make to record the sale of the machine for $25,000 cash?

b) What entry would Bylie make to record the sale of the machine for $15,000 cash?

+2
Answers (1)
  1. 25 March, 19:58
    0
    A)

    Cash $25000 Dr

    Accumulated depreciation-Machine $28000 Dr

    Machine $50000 Cr

    Gain on disposal $3000 Cr

    B)

    Cash $15000 Dr

    Accumulated depreciation-Machine $28000 Dr

    Loss on disposal $7000 Dr

    Machine $50000 Cr

    Explanation:

    The net book value of the machine is cost - accumulated depreciation.

    Thus, the NBV = 50000 - 28000 = $22000

    a. The gain on disposal = Cash received - NBV

    Gain on disposal = 25000 - 22000 = $3000 gain

    b. The gain on disposal = 15000 - 22000 = - $7000 (loss on disposal)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers