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Strawberry Fields purchased a tractor at a cost of $37.000 and sold it two years later for $24.600. Strawberry Fields recorde

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Answer #1

Depreciation per year = (Cost - Salvage value)/Useful life

= (37,000-8,000)/5 = 5800 per year

Book value after two years = 37,000 - (5800*2) = 25,400

Gain(Loss) = Cash received - Book value

= 24,600 - 25,400

Loss on sale 800

Cash 24,600
Accumulated Depreciation 11,600
Loss on sale 800
Equipment - Tractor 37,000
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