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hi and welcome to this video on the basics of disposing a fixed asset were going to learn about what happens when you sell a fixed asset lets say that you are the owner of the County Fair Co your company has extra cash and you believe that your best investment is a popcorn machine for the upcoming fair you start out with ten thousand in cash so this is what your balance sheet looks like on one one eighteen you buy a popcorn machine for ten thousand debits fixed assets for ten thousand credit to cash for ten thousand you have your popcorn machine for two years and make a ton of money selling bag after bag of popcorn you eventually get burnt out of spending every weekend at the fair so you decide to sell your popcorn machine to Circus Co what has been happening to your asset during the two years that you owned it you were depreciating it because it was decreasing in value lets say it has a five year useful life and that were using the straight-line method of depreciation so were go