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1 April, 05:21

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

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  1. 1 April, 05:42
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    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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