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luda_lava [24]
2 years ago
6

Berning Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimate

d life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2016 and was used 2,400 hours in 2016 and 2,100 hours in 2017. On January 1, 2018, the company decided to sell the tractor for $70,000. Berning uses the units-of-production method to account for the depreciation on the tractor. Based on this information, the entry to record the sale of the tractor will show:
Business
1 answer:
scoundrel [369]2 years ago
8 0

Answer:

$38,000 loss

Explanation:

For calculation of entry to record the sale of the tractor first we need to determine the total depreciation and net book value on Jan 1, 2018 which is shown below:-

Total depreciation = (Tractor cost - Salvage value) × (Hours in 2016 + Hours in 2017) ÷ Hours of operation

= ($180,000 - $20,000) × (2,400 + 2,100) ÷ 10,000

= $72,000

Net book value on January 1, 2018 = Tractor cost - Total depreciation

= $180,000 - $72,000

= $108,000

Loss on sale = Sold tractor amount - Net book value on January 1, 2018

= $70,000 - $108,000

= $38,000

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7 0
3 years ago
On September 1, 2021, Red Co., issued $48 million of its 10% bonds at face value. The bonds are dated June 1, 2021, and mature o
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Answer:

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3 years ago
An examination of the reasons given by people willing to accept the risks of entrepreneurship indicates that: A)the desire to ea
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Answer:

B)many people become entrepreneurs because they do not enjoy working for someone else.

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