Computing and Recording Proceeds from the Sale of PPE The following information was provided in the 2018 10-K of Hilton Worldwide Holdings, Inc. 2018 2017
Property and equipment, gross $678 $642
Accumulated depreciation (385) (360)
Property and equipment, net 293 282

Note 7 also revealed that depreciation expense on property and equipment totaled $43 million in 2018. The cash flow statement reported that expenditures for property and equipment totaled $58 million in 2018 and that there was no gain or loss on the sale of property and equipment during the year.

Required:
Using the information provided, prepare a journal entry to record the sale of property and equipment in 2018.

Here, we need to first compute the amount of the Property and equipment and the Accumulated depreciation to allow us prepare the journal entry to record the sale of property and equipment in 2018.

For the Property and equipment computation

Particulars                                                        Amount

PPE Beginning Balance Beginning                   $642

Add: Purchases during the year                        $58

Less: PPE Ending Balance Ending                    ($678)

Cost of the sold equipment                               $22  

For the Accumulated depreciation computation

Particulars                                                        Amount

Beginning Accumulated Depreciation            $360

Add: Depreciation expense 2018                    $43

Less: Ending Accumulated Depreciation        ($385)

Accumulated Depreciation balance               $18  

Date     Account titles and Explanation        Debit    Credit

             Cash                                                      $4

             Accumulated Depreciation                  $18

                      To Property & equipment                          $22

             (Being the sale of the property and equipment is recorded)

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Cash   $4

Accumulated Depreciation   $18

        To Property & equipment   $22

(Being the sale of the property and equipment is recorded)

Explanation:

The journal entry is shown below:

Cash   $4

Accumulated Depreciation   $18

        To Property & equipment   $22

(Being the sale of the property and equipment is recorded)

For recording this we debited the cash and accumulated depreciation as it increased the assets and reduced the accumulated depreciation balance and credited the property & equipment as it decreased the assets

The workings are as follows

For PPE

PPE Beginning Balance Beginning $642

Add:  Purchases during the year   $58

Less: PPE Ending Balance Ending ($678)

Cost of the sold equipment   $22

For Accumulated depreciation

Beginning Accumulated Depreciation  $360

Add: Depreciation expense 2018  $43

Less: Ending Accumulated Depreciation  ($385)

Accumulated Depreciation left  $18