Abbott Landscaping purchased a tractor at a cost of $45,000 and sold it three years later for $21,000. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $3,000 residual value. Tractors are included in the Equipment account. Required:
1. Record the sale.
2. Assume the tractor was sold for $16,600 instead of $21,000.

1.Dr Cash 21,000

Dr Accumulated depreciation - equipment 25,200

Cr Equipment 45,000

Cr Gain on sale of equipment 1,200

2.Dr Cash 16,600

Dr Accumulated depreciation - equipment 25,200

Dr Loss on sale of equipment 3,000

Cr Equipment 44,800

Explanation:

1.Preparation of Abbott Landscaping Record of sales

Since Abbott Landscaping tractor cost $45,000 and later sold for $21,000 after three years in which he recorded depreciation using the straight-line method with a five-year service life, and a $3,000 residual this mean the record of the sales will be:

Dr Cash 21,000

Dr Accumulated depreciation - equipment 25,200

Cr Equipment 45,000

Cr Gain on sale of equipment 1,200

2. Preparation to record the entry assume the tractor was sold for $16,600 instead of $21,000

Since we are Assuming that the tractor was sold for $16,600 instead of $21,000 this means the transaction will be recorded as:

Dr Cash 16,600

Dr Accumulated depreciation - equipment 25,200

Dr Loss on sale of equipment 3,000

Cr Equipment 44,800

Calculation for Accumulated depreciation = [($45,000 - $3,000)/ 5] x 3

=25,200

answer; someone must cover the cost associated with the provision of scarce goods in both sectors;