 And this is going to be the same type of thing, except now we've got $15,000 cash. So I won't calculate depreciation again, it's going to be the same calculation as up top. Here it is. It's the same 11,000. But now we got money for it as well. So we got cash for it. So we got this 15,000. Everything else is in essence, the same. So the first year of entry is the same. We're going to have to say, okay, it was at $88,000 in accumulated depreciation. It's not fully depreciated and we have to ask ourselves, well, do we have to record any more depreciation before we do the disposal that hasn't been recorded because it's not the end of the month or end of the year and therefore the adjusting entry has not been made. And we're going to say, yeah, we do. We have to record the 11,000 for the half a year that has passed since the last adjustment, which has not yet been recorded. So we're going to record our normal adjusting entry. That's going to be depreciation expense debit. So it's an F70. We're going to copy the depreciation expense, put that up top in B61, right click and paste 1, 2, 3, 4, 11,000. Then we're going to credit something for the 11,000. I'm going to do that with our plug formula negative of this 11,000. And then what we're going to go to, the account we're going to go to there is accumulated depreciation. So we're going to copy accumulated depreciation, right click and copy, put that on the bottom in B62, right click and paste 1, 2, 3. Now that's going to be our normal type of just our adjusting journal entry that we're doing here to get us ready for the disposal process. I'm going to indent this, go into the home tab, alignment, increase indenting and then we'll post this out. So we'll post the depreciation expense to the trial balance. We are in H70. So we will say equals and point to that's 11,000 and enter. Then we'll go to accumulated depreciation. We're going to post this side to the trial balance here. We are in cell H46 equals pointing to that 11,000, bringing the balance from 88,000 up by 11,000 to 99,000. Now we can see we're not fully depreciated again, it's 110,000 minus the 99,000. We still have a book value of 11,000. But this time we got money, we scrapped it and got some money for the scrap of 15,000. So now when we do our second journal entry we say is cash affected? I'm going to say yeah, we got cash on the scrapping 15,000. So I'm going to copy the cash, we'll skip a line and put another journal entry in B4064. Right click and paste 123 and we're going to increase it with a debit 15,000. Then we're going to do our normal process to take everything off the books and again it's really helpful to have the trial balance because we know this needs to go to zero, we know this needs to go to zero and then we just need to do whatever we need to do in order to make the debits and the credits balance, meaning we'll post whatever the difference is to gain or loss. So I'm going to do the accumulated depreciation first because it's going to be a debit and we'll go a little bit more in order of the debits on top if we can. So this has a credit balance of 99,000, we need to do the opposite thing to it which is a debit. So we'll copy accumulated depreciation, right click and copy, put that in B65, right click and paste 123. The amount will be the 99,000 and remember you're going to have to, if you don't have a trial balance and you didn't post this, you're going to have to realize that it was 88 and we made an adjustment, it's now 99 that we now need to take down to zero. And then the other side of this is going to be the equipment account. So it has a debit balance that needs to go down to zero because we're making a disposal. So we'll do the opposite thing to it, our credit. So we'll right click and copy the equipment, put that in B66, right click and paste 123. We're going to go ahead and indent that at the home tab, alignment, increase indenting and the amount will be in D66 negative 110,000. Okay, so now the debits don't equal the credits, we're at 114. On the debits we're at 110 on the credits. That means we need another credit to be in balance. So we need another credit and I'm going to do that with our negative sum formula. If I highlight this, it'll do the math for us, 4,000 or if I say it's 114 minus 110, 4,000. We'll use our negative sum, plug formula, negative sum, double click the sum, highlight from the 15 down to the 110 and that gives us our 4,000 that we need. Now again, it's a little confusing to say that's going to be a gain or loss, remember that's always going to be a gain or loss when we're disposing. It might be confusing to know which is which here, most confusing in this one, then in the prior ones if you look at it, of course the book value is 110 minus 99 or 11,000 and we got 15,000. So we got more than the book value. So that's one way we can tell it's got to be a gain here, we got a gain. We got more money than the book value. The other way you can see it is of course it's a credit and credits are kind of good on the income statement. They're going to increase net income. So those are two ways you can tell that it's going to be a credit. So we're going to copy the gain or loss, right click and copy. I'm going to put that in B67, right click and paste, 1, 2, 3. I'm going to go ahead and indent it, go into the home tab, alignment, increase indenting and then we'll post this out. We'll post cash first, here's cash. Here it is on our worksheet in H61. We will say equals and point to the cash and that brings the balance up from 500,000 by 15,000 to 515,000. Here's a cumulative depreciation. Here it is on our trial balance. We're going to double click on H64 because there's something in it already. We'll double click, go to the end of it, plus and point to that 99,000 bringing the balance down to zero. Then we've got the equipment at 110. Here's the equipment on the trial balance. I'm sorry, here's the equipment on the trial balance. We need to post that to H63 where we will say equals point to that 110,000 bringing the balance down to zero. And then the last one we've got the gain or loss on disposal, 4,000. We will post that down here in H71 by saying equals point to that 4,000. Bringing the balance from zero up by 4,000 to 4,000. So now that we've taken it off the books, the equipment and the accumulated depreciation, we recorded the cash. And now we had to record the depreciation expense which brought down net income. And then we recorded 4,000 of gain which brought up net income. Net effect of these two journal entries is 7,000 decrease. So and remember this is a credit. That means it's a net income, the revenue minus expenses. And then it changed by, it went down by 7,000 bringing this down to 59,000. So the expense journal entry brought down net income. And then the gain on the sale brought it up for a net decrease of 7,000.