logan's Landscaping purchased a tractor at a cost of $35,000 and sold it three years later...

logan's Landscaping purchased a tractor at a cost of $35,000 and sold it three years later for $10,000. Landscaping recorded deprecation using the straight-line method, a five-year service life, and a 5000 residue little value. Factors are included in the equipment account. The journal entry to record the sale would include

Expert Solution

Entry will include

Debit of cash by $10,000

Debit accumulated depreciation by $18,000

Debit of Loss on sale of equipment by $7,000

Credit of Equipment by $35,000

.

Working

Straight line
Cost	$ 35,000.00
Accumulated depreciation	$ 18,000.00
Book value	$ 17,000.00

Sales price	$ 10,000.00
Book value	$ 17,000.00
Gain /(loss)	$ (7,000.00)

Entry for sale is

General Journal	Debit	Credit
Cash	$ 10,000
Accumulated Depreciation-Equipment	$ 18,000
Loss on sale of Equipment	$ 7,000
Equipment		$ 35,000
(To record sale of Equipment)

.

Straight line Method
A	Cost	$ 35,000
B	Residual Value	$ 5,000
C=A - B	Depreciable base	$ 30,000
D	Life [in years left ]	5
E=C/D	Annual SLM depreciation	$ 6,000

.

Depreciation schedule-Straight line method
Year	Book Value	Depreciation expense	Accumulated Depreciation	Ending Book Value
1	$ 35,000.00	$ 6,000.00	$ 6,000.00	$ 29,000.00
2	$ 29,000.00	$ 6,000.00	$ 12,000.00	$ 23,000.00
3	$ 23,000.00	$ 6,000.00	$ 18,000.00	$ 17,000.00

ekkarill92 answered 2 hours ago

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logan's Landscaping purchased a tractor at a cost of $35,000 and sold it three years later...

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