Pacifica Manufacturing retired a computerized metal stamping mac 1 answer below »

Pacifica Manufacturing retired a computerized metal stamping machine on December 31, 2009. Pacifica sold the machine to another company and did not replace it. The following data are available for the machine:
Cost (installed), 1/1/2004 ………………………$920,000
Residual value expected on 1/1/2004 …………. 160,000
Expected life, 1/1/2004 ………………………… 8 years
The machine was sold for $188,000 cash. Pacifica uses the straight-line method of depreciation.

Required:
1. Prepare the journal entry to record depreciation expense for 2009.
2. Compute accumulated depreciation at December 31, 2009.
3. Prepare the journal entry to record the sale of the machine.
4. Explain how the gain or loss on the sale would be reported on the 2009 income statement.

 

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