As part of a renovation of its showroom, O'Keefe Auto Dealership sold furniture and fixtures that were eight years old for $4,900 in cash. The assets had been purchased for $56,000 and had been depreciated using the straight-line method with no residual value and a useful life of ten years.

a. Prepare a journal entry to record this transaction.

General Journal
Description	Debit	Credit
Cash	Answer	Answer
Accumulated depreciation	Answer	Answer
AnswerCashGain on sale of furniture and fixturesLoss on sale of furniture and fixturesFurniture and fixtures	Answer	Answer
AnswerCashGain on sale of furniture and fixturesLoss on sale of furniture and fixturesFurniture and fixtures	Answer	Answer

b. Show how the sale of the furniture and fixtures affects the balance sheet and income statement.

Remember to use negative signs with answers, when appropriate.

Transaction	Cash Asset	+	Noncash Assets	-	Contra Assets	=	Liabilities	+	Contr. Capital	+	Earned Capital		Revenue	-	Expenses	=	Net income
Sold furniture and fixtures.	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer