Question

Crane Company sells office equipment on July 31, 2017, for $21,850 cash. The office equipment originally cost $77,730 and as of January 1, 2017, had accumulated depreciation of $39,740. Depreciation for the first 7 months of 2017 is $4,030. Prepare a tabular summary to (a) update depreciation to July 31, 2017, and (b) record the sale of the equipment. (la transaction causes a decrease in Assets Liabilities or Stockholders' Equity place a negative sign for parentheses) in front of the amount entered for the particular Asset, Liability or Equity Item that was reduced Assets - Liabilities + Cash Equipment - Common Stock Accum. Depr.- Equip. -39740 $ 77730 -4030 21850 -77730

Answer 1

The Journal entry shall be as follows:
Date	Description	Debit	Credit
July 31,2017	Depreciation expenses-Equipment	$4,030
	Accumulated Depreciation-Equipment		$4,030
July 31,2017	Cash	$21,850
	Accumulated Depreciation-Equipment	$43,770
	Loss on disposal of equipment	$12,110
	Equipment		$77,730
	Assets					=	Liabilities	+	Stockholder's Equity
											Retained earnings
	Cash	+	Equipment	-	Accum. Depr.-Equip	=		+	Common stock	+	Revenues	-	Expenses	-	Dividend
(a)	$0	+	$0	-	$4,030	=	$0	+	$0	+	$0	-	$4,030	-	0		Depreciation on equipment
(b)	$21,850	+	-$77,730	-	-$43,770	=	$0	+	$0	+	-$12,110	-	$0		0		Loss on disposal