Answer:
Preparation of how the journal entry will look like to record the sale
Dr Cash $60,000
Dr Accumulated Depreciation $216,000
Dr Gain/Loss on Disposal of Assets $24,000
Cr Property, Plant & Equipment $300,000
Explanation:
Since we assumed that a piece of plant equipment was put into service on January 1, 2014 at a cost of $300,000 with a salvage value of $60,000 which is been sold out on June 30, 2018 for $60,000 in which the accumulated depreciation was $216,000 this means we have to record the transaction by Debiting Cash with $60,000 ,Debiting Accumulated Depreciation with $216,000 and Debiting Gain/Loss on Disposal of Assets with $24,000 while we Credit Property, Plant & Equipment with $300,000
Calculation of Gain/Loss on Disposal of Assets
Using this formula
Carrying Value = Cost - Accumulated
Depreciation
The Carrying value will be :
300,000 - 216,000 = $84000
The asset loss on disposal of Assets will be:
60,000 - 84,000 = loss of 24000
