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16 December, 03:53

Antone Company sells office equipment on July 31, 2017, for $21,000 cash. The office equipment originally cost $72,000 and as of January 1, 2017, had accumulated depreciation of $42,000. Depreciation for the first 7 months of 2017 is $4,600. Prepare a tabular summary to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment.

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  1. 16 December, 04:00
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    (a) update depreciation to July 31, 2017

    Depreciation - Profit and Loss $4,600 (debit)

    Accumulated Depreciation - Statement of Financial Position $4,600 (credit)

    (b) record the sale of the equipment

    Cash $21,000 (debit)

    Accumulated Depreciation $ 46,600 (debit)

    Loss on Sale of Equipment $4,400 (debit)

    Office Equipment $72,000 (credit)

    Explanation:

    (a) update depreciation to July 31, 2017

    Recognise an Expense - Depreciation in Income Statement

    (b) record the sale of the equipment

    De-recognise the Office Equipment at Cost

    De-recognise the Total Accumulated depreciation of equipment to date

    Recognise the Cash asset received at Sale of Office Equipment

    Recognise the Loss arising from Sale of Equipment in Income Statement
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