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1 April, 22:20

Crane Company sells office equipment on July 31, 2022, for $21,850 cash. The office equipment originally cost $77,730 and as of January 1, 2022, had accumulated depreciation of $39,740. Depreciation for the first 7 months of 2022 is $4,030. Prepare the journal entries to (a) update depreciation to July 31, 2022, and (b) record the sale of the equipment.

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  1. 1 April, 23:55
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    The journal entries are shown below:

    a. Depreciation Expense A/c Dr $4,030

    To Accumulated Depreciation - Machinery A/c $4,030

    (Being depreciation expense is recorded)

    b. Cash A/c Dr $21,850

    Accumulated Depreciation - Office equipment A/c $43,770

    Loss on Disposal of Office equipment A/c $12,110

    To Office equipment A/c $77,730

    (Being sale of machinery is recorded and the remaining balance is debited to the loss on Disposal of office equipment A/c)

    The accumulated depreciation is computed below:

    = $39,740 + $4,030

    = $43,770
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