Ronny's Red Hat Company purchased machinery on July 3, Year 1 for $150,000. Ronny, the owner, estimated that the machinery would be sold for $20,000 in 10 years. If Ronny's red Hat Company uses straight line depreciation, what is included in the entry to record the disposition of the asset on August 31, Year 3 if the machinery is sold for $115,000 cash?

• 1. Dr. Loss on disposition $2,500

• 2. Cr. Gain on disposition $4,000

• 3. Dr. Loss on disposition $6,834

• 4. Dr. loss on disposition $4,000

• 5. Dr. Loss on disposition $334

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Based on the information available in the question we can answer as follows Requirement 1 Depreciati... View the full answer