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Equipment is purchased at a cost of $10,000 with no estimated residual value and is depreciated at a straight-line rate of 10%. The equipment is
Equipment is purchased at a cost of $10,000 with no estimated residual value and is depreciated at a straight-line rate of 10%. The equipment is sold for cash on October 12 of the eighth year of its use. The balance of the accumulated depreciation account as of the preceding December 31 is $7,000. What is the effect on the accounts and financial statements of updating depreciation for the nine months of the current year?
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