Explore BrainMass
Share

# Asset Disposal

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Assume that Gonzalez Company purchased an asset on January 1, 2006, for \$60,000. The asset had an estimated life of six years and an estimated residual value of \$6,000. The company used the straight-line method to depreciate the asset. On July 1, 2008, the asset was sold for \$40,000cash.

Required:

1. Make the journal entry to record depreciation for 2008. Also record all transaction necessary for the sale of the asset.

2. How should the gain or loss on the sale of the asset be present on the income statement?

#### Solution Preview

1. Make the journal entry to record depreciation for 2008. Also record all transaction necessary for the sale of the asset.

The depreciation per year is (60,000-6,000)/6 = 9,000
The depreciation for 2008 will be for 6 months = 9,000/2 = 4,500. The ...

#### Solution Summary

The solution explains the calculations relating to asset disposal

\$2.19
Similar Posting

## Acct 541 Client Response for issues of inventory, interest, asset disposal, impairment

Consider the following scenario: As a newly hired Staff I, you are responsible for analyzing the work papers for one of the clients of your organization. Your client is not clear about why you are asking for information on the following topics:

o Adjusting lower cost of market inventory on valuation
o Capitalizing interest on building construction
o Recording gain or loss on asset disposal