Abbott Landscaping purchased a tractor at a cost of $32,000 and sold it three years later for
Question:
Required:
1. Record the sale.
2. Assume the tractor was sold for $10,000 instead of $16,000. Record the sale.
Step by Step Answer:
Requirement 1 The entry to record the sale is as follows Debit Credit Cas...View the full answer
Financial Accounting
ISBN: 9780078110825
2nd Edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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