On December 31,2018,Far Niente Winery sold a wine press for $545,000;the wine press had originally cost $900,000.Cash was paid by the buyer of the press.Accumulated Depreciation on the press,updated to the date of disposal,was $450,000. What is the journal entry to record the disposal of the asset?

Question

Quizplus · Accepted Answer

Gain (loss)= Proceeds from sale − Book value of equipment
= $545,000 − ($900,000 − $450,000)= $95,000
Entry to record sale: Debit Cash (to increase that asset account)for $545,000,debit Accumulated Depreciation (to decrease that contra-asset account)for $450,000,credit Gain on Disposal for $95,000 (calculated above),and credit Equipment (to decrease that asset account)for $900,000

On December 31,2018,Far Niente Winery Sold a Wine Press for $545,000;the