Amachine costing $75,000 is purchased on september 1, year 1. the machine is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. double-declining-balance depreciation is used. if the machine is sold on december 31, year 3 for $13,000, the journal entry to record the sale will include: a)a credit to gain on sale for $8,000. b)a debit to loss on sale for $2,625. c)a credit to accumulated depreciation for $59,375. d)a debit to loss on sale for $3,042. e)a credit to gain on sale for $4,979.

b. A debit to loss on sale for $ 2,625

The following calculation in the journal regarding sales losses

Year 1 72,000

Year 2 62,500

Year 3 31,250

Year 1 50%

Year 2 50%

Year 3 50%

Year 1 12,500

Year 2 31,250

Year 3 15,625

Year 1 62,500

Year 2 31,250

Year 3 15,625

Losses on engine sales = value - damage

Losses on engine sales = $ 15,625 - $ 13,000

Losses on engine sales = $ 2,625

There are several factors that cause a decrease in the ability of fixed assets to provide benefits that can be identified as physical depreciation or functional depreciation:

Physical depreciation occurs from damage and wear when used and due to weather effects.

Functional depreciation (functional depreciation) occurs if the said fixed assets are no longer able to provide benefits at the level as expected.

Learn More

Depreciation  

Loss on sale  

Details

Grade: High School

Subject: Business

Keyword: depreciation, loss, sale