A company purchased a tractor at a cost of $36,000 and sold it three years later for $18,000. The company recorded depreciation using the straight-line method, a five-year service life, and a $2,000 residual value. Tractors are included in the Equipment account.
1-Record the sale of equipment.
2-Assume the tractor was sold for $11,200 instead of $18,000. Record the sale.

1.

   Cash                                                          $18000 Dr

   Accumulated depreciation-Equipment   $20400 Dr

                  Equipment Account-Tractor               $36000 Cr

                  Gain on disposal                                  $2400 Cr

2.

  Cash                                                             $11200 Dr

  Accumulated depreciation-Equipment   $20400 Dr

  Loss on Disposal                                         $4400 Dr

                      Equipment Account-Tractor               $36000 Cr

Explanation:

a.

The straight line method of depreciation charges equal or constant amount of depreciation expense through out the useful life of an asset. The formula for depreciation expense per year under straight line method is,

Depreciation expense per year = (Cost - Residual value) / estimated useful life

Depreciation expense per year = (36000 - 2000) / 5  = $6800

The accumulated depreciation after three years = 6800 *3 = $20400

After three years, the tractor had a Carrying value of = 36000 - 20400 = $15600

Thus, there is a gain on disposal of = 18000 - 15600 = 2400

b.

If the cash received from sale or disposal was $11200. Then there will be a loss on disposal as carrying value is greater than the cash received.

The loss on disposal = 11200 - 15600 = 4400 loss

im going to come back to you?

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know