A Computer, with a Cost of $8,000 Is Sold on July

question 93

Essay

A computer, with a cost of $8,000 is sold on July 1. Accumulated depreciation up to the date of sale is $5,000. Journalize the entries for the disposal of the computer under the following INDEPENDENT scenarios:
1. The computer was sold for $6,000.
2. The computer was sold for $1,000.
3. The computer is obsolete and was thrown in the trash.

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Definitions:

Factored Inventory Loan

A type of financing where a company borrows money against the value of its inventory, which is often controlled or managed by the lender.

Line Of Credit

A financial arrangement between a lender and a borrower that allows the borrower to draw funds up to a predefined limit as needed.

Operating Cycle

The operating cycle is the duration it takes for a business to convert its inventory and other inputs into cash through sales, encompassing the production and sales process.

Accounts Receivable Turnover

A financial metric that measures how frequently a business can convert its accounts receivable into cash over a specific period.