The machinery costs 182,000 with a six year salvage value of 14,000. On December 31, at the end of its fifth year in operations, it is disposed of

What would be the journal entry at the year of its disposal?

To determine the journal entry at the year of disposal, we need to calculate and consider the accumulated depreciation and gain or loss on disposal.

First, we need to find the accumulated depreciation. Since the machinery has been in operation for five years, we can calculate the annual depreciation using the straight-line method: (Cost - Salvage Value) / Useful Life.

Given:
Cost of machinery (initial cost) = $182,000
Salvage value = $14,000
Useful life = 6 years

So, the annual depreciation would be: (182,000 - 14,000) / 6 = $28,000.

Now, we can calculate the accumulated depreciation up to the end of the fifth year by multiplying the annual depreciation by the number of years: $28,000 * 5 = $140,000.

Next, we need to calculate the gain or loss on disposal. This is determined by comparing the net book value (cost - accumulated depreciation) with the disposal amount.

Net book value = Cost - Accumulated Depreciation = $182,000 - $140,000 = $42,000.

Let's assume the disposal amount is $35,000. Comparing the net book value ($42,000) with the disposal amount ($35,000), we can calculate the gain or loss:

Gain or loss on disposal = Disposal amount - Net Book Value = $35,000 - $42,000 = -$7,000 (loss).

Based on the calculations, the journal entry at the year of disposal would be as follows:

Debit: Accumulated Depreciation (to close out the total accumulated depreciation)
Credit: Machinery (to remove the machinery)
Credit: Loss on Disposal of Machinery (to record the loss on disposal)

The specific dollar amounts would depend on the actual figures for your scenario.