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(a) Echo Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 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 $37,200 instead of $41,000.

Respuesta :

TomShelby

Answer:

(A)

accumualted depreication equipment 41,000 debit

                          equipment                   41,000 credit

(B)

accumualted depreication equipment 37,200 debit

loss at disposal                                        3,800 debit

                          equipment                   41,000 credit

Explanation:

to retire the equipment itt will write-off their equipment account

if the accumulated depreication matches the book value then there will be no loss at disposal while if lower a loss will be recognized.

(a) 41,000 book value - 41,000 depreciation = 0 no loss

(b) 41,000 - 37,200 = 3,800 loss at disposal

abiolataiwo2015

Prepare the  journal entries to record these transactions If:

  • Echo Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment.  
  • Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,200 instead of $41,000.

Echo company journal entries

a) Debit Accumulated depreciation $41,000

Credit Equipment $41,000

(To record delivery equipment)

b)  Debit Accumulated depreciation $37,200

Debit Loss on Disposal of Plant Assets Debited $3,800

($41,000-$37,200)

Credit Equipment  $41,000

(To record accumulated depreciation)

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