Concept: Sale of Fixed Assets6m
Example: Sale of Fixed Assets5m
Example: Sale of Fixed Assets8m
Mason Company purchased a new machine on February 1, 1991, for $33,000. At the time of acquisition, the machine was estimated to have a service life of ten years and a residual value of $9,000. The company employs the straight-line method of calculating depreciation. On September 30, 1998, the machine was sold for $4,000 cash.
Calculate the loss recorded on the sale.
Panera Bread Company owns a bread-slicing machine, which initially cost $10,000. As of June 5, 2005, the balance in the accumulated depreciation account for the bread slicer was $8,000. The slicer was sold to the St. Louis Bread Company on June 6, 2005 for $1,500. The journal entry to record the sale of the bread slicer will include a:
a. Debit to Accumulated Depreciation for $8,000
b. Debit to Accumulated Depreciation for $1,500
c. Credit to Accumulated Depreciation for $8,000
d. Credit to Accumulated Depreciation for $1,500
On December 31, 2009, Mason Inc. sold a used industrial crane for $1,000,000 cash. The original cost of the crane was $5.0 million and its accumulated depreciation equaled $4.1 million on December 31, 2009 (before 2009 depreciation expense); they had been using the straight-line depreciation method. The estimated residual value was zero and its useful life was 25 years when the asset was purchases. What is the gain or loss on the equipment on December 31, 2009?
A. $300,000 loss
B. $100,000 gain
C. $300,000 gain
D. $100,000 loss
E. No Gain or Loss