Answer:
(a) update depreciation to July 31, 2017
Depreciation - Profit and Loss $4,600 (debit)
Accumulated Depreciation - Statement of Financial Position $4,600 (credit)
(b) record the sale of the equipment
Cash $21,000 (debit)
Accumulated Depreciation $ 46,600 (debit)
Loss on Sale of Equipment $4,400 (debit)
Office Equipment $72,000 (credit)
Explanation:
(a) update depreciation to July 31, 2017
Recognise an Expense - Depreciation in Income Statement
(b) record the sale of the equipment
De-recognise the Office Equipment at Cost
De-recognise the Total Accumulated depreciation of equipment to date
Recognise the Cash asset received at Sale of Office Equipment
Recognise the Loss arising from Sale of Equipment in Income Statement
Here, we will prepare records(entry) on Depreciation and Sales of equipment.
The Net Book value of the Equipment = Cost - Accumulated Depreciation - Current year Depreciation
The Net Book value of the Equipment = $72,000 - $42,000 - $4,600
The Net Book value of the Equipment = $25,400
Loss on sale of Office Equipment = Net book value - Sale valu
Loss on sale of Office Equipment = $25,400 - $21,000
Loss on sale of Office Equipment = $4,400
The preparation of the entries is as follow:
Date Account Title and Explanation Debit Credit
July 31,2017 Depreciation $4,600
Accumulated Dep. - Office Equipment $4,600
(Being Depreciation provided)
July 31,2017 Cash $21,000
Loss on sale of Office Equipment $4,400
Accumulated Dep. -Office Equip. $46,600
Office Equipment $72,000
(Being record sale of equipment)
See similar solution here
brainly.com/question/15697930
