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Strawberry Fields purchased a tractor at a cost of $36.000 and sold it two years later for $23.900. Strawberry Fields recorde

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Answer #1

1.

Annual depreciation = ( Cost price of tractor - Residual value)/ Useful life

= (36,000-9,000)/5

= 27,000/5

= $5,400

Accumulated depreciation for 2 year = 5,400 x 2

= $10,800

Book value of equipment at the date of sale = Cost of equipment - Accumulated depreciation

= 36,000-10,800

= $25,200

Sale price of Equipment = $23,900

Loss on sale of equipment = Book value of equipment - Sale price of Equipment

= 25,200-23,900

= $1,300

Loss on sale $1,300

2.

Journal
Date General Journal Debit Credit
Cash $23,900
Loss on sale of equipment $1,300
Accumulated depreciation- equipment $10,800
Equipment $36,000

Kindly comment if you need further assistance. Thanks‼!

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