Disposal of Property, Plant and Equipment
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Question:
Explain accounting steps for the sale and retirement of property, plant and equipments and record journal entries for the following transactions.
On 1st July 2002, Jessica Ltd purchased equipments for $130000 cash. It was estimated that the equipments would have a salvage value of $ 10000 and a useful life of six years. The corporation uses straight line method of amortization and has a December 31 year end.
Record the disposal of equipments on July 1 2006, under each of the following independent situations:
1. it was sold for $35500
2. It was sold for $42000
3. It was retired.
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The solution explains the accounting steps for the sale and retirement of property, plant and equipments and record journal entries for the given transactions.
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Solution to the problem is provided in M.S.Word file attached herewith in the following parts.
1. Accounting steps of sale and retirement of property are fully ...
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