Problem
ABC Company depreciates newly acquired assets closest to the nearest month. The company has recorded depreciation on the machines to December 31, 2021. No depreciation has been done for 2022. It sold the following two machines in 2022:
Machine A Machine B
Cost $92,000 $43,000
Purchase date July 1, 2019 Jan. 1, 2020
Useful life 8 years 8 years
Residual value $4,000 $3,000
Depreciation method Straight-line Double diminishing-balance
Date sold July 1, 2022 Aug. 1, 2022
Sales price $37,000 $12,000
Task
1. Calculate the carrying value of each machine on the date of disposal.
2. Prepare the journal entry or entries in good form to record the sales of the assets in 2022.