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minnick4
May 2, 2008, 02:52 PM
If I bought equipment for $5000 and sold it for $3500 and accumlated depreciation was $1800 and depreciation was $450 prior to the sale is this the right transaction


Depreciation Expense 450
Accumulated Depreciation Equipment 450

Cash 3500
Accumulated Depreciation Equipment 3500
Equipment 5000
Gain on Disposal 750
morgaine300
May 5, 2008, 02:12 AM
You need to make sure you put Dr & Cr on your entries. For your first entry, it's correct if I assume you've correctly listed the debit first. (And it's not good to assume things like that.) In your second entry, since there are 4 accounts, I have no idea what you meant to dr & cr.

But... either way that second entry wouldn't balance. It doesn't, does it? The gain is correct, but you couldn't have gotten that gain with accumulated depreciation of 3500. Meaning you figured out the numbers correctly, but then did the wrong thing in the entry. If there was already 1800 depreciated and you added 450 more, how much do you now have in the accumulated account? Not 3500.