Monty Corporation owns machinery that cost $26,400 when purchased on July 1, 2017. Depreciation has been recorded at a rate of $3,168 per year, resulting in a balance in accumulated depreciation of $11,088 at December 31, 2020. The machinery is sold on September 1, 2021, for $13,860. Prepare journal entries to (a) update depreciation for 2021 and (b) record the sale.

a

Depreciation Expense $2,112 (debit)

Accumulated Depreciation  $2,112 (credit)

b.

Cash $13,860 (debit)

Accumulated Depreciation $13,200 (debit)

Machinery at Cost $26,400 (credit)

Profit and loss $660 (credit)

Explanation:

a.

2021 Depreciation Expense calculation

Depreciation Expense = $3,168 × 8 /12

                                      = $2,112

Therefore total accumulated depreciation will be :

Accumulated depreciation = $11,088 + $2,112

                                             = $13,200

b.

The following happen when the asset is sold :

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