Greenscape Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200. Greenscape recorded depreciation using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $10,600 instead of $16,200. Record the sale. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 Record the sale of tractor.
Greenscape Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200. Greenscape recorded depreciation using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $10,600 instead of $16,200. Record the sale. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 Record the sale of tractor.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Greenscape Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200.
Greenscape recorded depreciation using the straight-line method, a five-year service life, and a $4,000
residual value. Tractors are included in the Equipment account.
2. Assume the tractor was sold for $10,600 instead of $16,200. Record the sale. (If no entry is required for a particular
transaction/event, select "No Journal Entry Required" in the first account field.)
View transaction list
Journal entry worksheet
1
Record the sale of tractor.
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