A $136,000 tractor was sold for $31,000 in cash by a business. The tractor's total depreciation was $69,900. A loss of $35,100 should be recorded by the business.
A business is an entrepreneurial organization or institution that engages in commercial activity. They may be industrial, commercial, or other types. Businesses that are for profit operate with the intention of making a profit, whereas those that are nonprofit focus on charity purposes. The sole proprietorship, partnership, corporation, and S corporation of Businesses are the four company structures that are used the most. Depreciation is a term used in accounting to describe two related concepts: first, the actual decline in an asset's fair value over time, such as the value of factory equipment depreciation declining annually as it is used and wears out; and second, the allocation in accounting statements of the asset's initial cost to the periods during which the asset is used (depreciation with the matching principle)
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