ABC Ltd. purchased a machine for $50,000 in 30 June 2014. Assume that ABC Ltd....
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ABC Ltd. purchased a machine for $50,000 in 30 June 2014. Assume that ABC Ltd. applies the straight-line depreciation method with annual depreciation expense of $12,000. This machine was sold on 30 June 2016 for $30,000 cash. ABC Ltd. should record which of the following journal entries to record the sale of this machine?
Select one:
a. Dr Cash $30,000 Dr Accumulated Depreciation $24,000 Dr Loss on Sale $4,000 Cr Machine (cost) $50,000
b. Dr Cash $30,000 Dr Accumulated Depreciation $12,000 Dr Loss on Sale $8,000 Cr Machine (cost) $50,000
c. Dr Cash $30,000 Dr Accumulated Depreciation $24,000 Cr Gain on Sale $4,000 Cr Machine (cost) $50,000
d. Dr Cash $30,000 Dr Accumulated Depreciation $12,000 Dr Gain on Sale $8,000 Cr Machine (cost) $50,000
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