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Q. 9-7SE

Expert-verified
Found in: Page 527

### Horngren'S Financial And Managerial Accounting

Book edition 6th
Author(s) Tracie L. Miller-Nobles, Brenda L. Mattison
Pages 992 pages
ISBN 9780134486833

# Discarding of a fully depreciated asset On June 15, 2017, Family Furniture discarded equipment that cost $27,000, a residual value of$0, and was fully depreciated. Journalize the disposal of the equipment

Accumulated Depreciation is not a process of valuation. Businesses do not record depreciation based on changes in the asset’s market value.

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## Meaning of Disposal on Equipment

The term disposal on equipment refers to the process of eliminating the value of the equipment from the company's books of account. This helps the company reduce the value of the asset according to its age and use in the business.

## Journalize the disposal of the equipment

 Date Account & Explanation Debit ($) Credit ($) Accumulated depreciation-Equipment $27,000 Equipment$27,000