Hello. I have spent a long time on this one question? Can anyone please help? Thanks.The following accounts and corresponding balances were drawn from Winston Company’s 2012 and 2011 year-end balance sheets. Account Title: Machinery 2011: $425,000 2012: $520,000 Old machinery with a book value of $5,000 (cost of $25,000 minus accumulated depreciation of $20,000) was sold. The income statement showed a gain on the sale of machinery of $4,000.The cost of machinery purchased is______
Beg Balance 425,000 less cost of machinery sold 25,000 plus cost of new machinery 120,000 = End Balance of 520,000 A gain on sale of 4,000, with a book value 5,000, means cash proceeds were 9,000. DR Cash 9,000 DR Accum deprec 20,000 CR Machinery 25,000 CR gain on sale 4,000
