Question

During 2015, Côté Company disposed of three different assets. On January 1, 2015, prior to the disposal of the assets, the accounts reflected the following:
The machines were disposed of in the following ways:
a. Machine A: Sold on January 1, 2015, for $ 7,200 cash.
b. Machine B: Sold on April 1, 2015, for $ 8,500; received cash, $ 2,500, and a note receivable for $ 6,000, due on March 31, 2016, plus 6 percent interest.
c. Machine C: Suffered irreparable damage from an accident on July 2, 2015. On July 10, 2015, a salvage company removed the machine immediately at no cost. The machine was insured, and $ 18,000 cash was collected from the insurance company.
Required:
1. Prepare all journal entries related to the disposal of each machine in 2015.
2. Explain the accounting rationale for the way that you recorded each disposal.


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  • CreatedAugust 04, 2015
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