Presented Below Are Selected Transactions for Werley Company for 2018

question 68

Essay

Presented below are selected transactions for Werley Company for 2018.
Jan. 1 Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2008. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value.
April 30 Sold equipment for $34,000 that was purchased on January 1, 2015. The equipment cost $90,000, and had a useful life of 5 years with no salvage value.
Dec. 31 Discarded a business automobile that was purchased on April 1, 2014. The car cost $27,000 and was depreciated on a 5-year useful life with a salvage value of $2,000.
Instructions
Journalize all entries required as a result of the above transactions. Werley Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2017.

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Definitions:

Lump-Sum Payment

A single payment made at a particular time, as opposed to multiple payments over time.

Natural Monopoly

A market condition where a single firm can supply a product or service to an entire market at a lower cost than what two or more firms can, often due to significant fixed or startup costs.

Competitive Level

Refers to the state of competition within a market where firms strive to gain an advantage over each other.

Marginal Cost

The added cost of producing one additional unit of a product.