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3 years ago

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Abbott Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200. Abbott recorded depreciat

ion using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account.
Assume the tractor was sold for $12,400 instead of $19,800. Record the sale.

1 answer:

Viefleur [7K]3 years ago

3 0

Answer:

Debit Credit

Cash $16,200

Accumulated depreciation-equipment $15,600

Gain on sale of equipment 1,800

Equipment 30,000

(To record sale of equipment)

Explanation:

According to the given data we have the following:

Equipment=$30,000

Cash=$16,200

Therefore,The accumulated depreciation would be=($30,000-4,000)/5*3

The accumulated depreciation would be=$15,600

Therefore, the sale to record would be as follows:

Debit Credit

Cash $16,200

Accumulated depreciation-equipment $15,600

Gain on sale of equipment 1,800

Equipment 30,000

(To record sale of equipment)

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