Berman Company sold equipment on July 1, 2019 for $50,000. The equipment had cost $140,000 and had $80,000 of accumulated depreciation as of January 1, 2019. Depreciation for the first 6 months of 2019 was $8,000. Instructions Prepare the journal entry to record the sale of the equipment.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Berman Company sold equipment on July 1, 2019 for $50,000. The equipment had cost $140,000 and had $80,000 of
Instructions
Prepare the
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