Garcia Co. owns equipment that cost $76,800, with accumulated depreciation of $40,800. Record the sale of the equipment under the following three separate cases assuming Garcia sells the equipment for (1) $47,000 cash, (2) $36,000 cash, and (3) $31,000 cash.

1. Cash                                                          Debit    $ 47,000

  Accumulated Depreciation equipment   Debit  $ 40,800

  Gain on sale of equipment                       Credit                       $  11,000

  Equipment                                                  Credit                      $ 76,800

To record sale of equipment for $ 47,000 and gain on sale of $ 11,000

2. Cash                                                          Debit    $ 36,000

   Accumulated Depreciation equipment   Debit   $ 40,800

   Equipment                                                 Credit                          $ 76,800

To record sale of equipment for $ 36,000

3.  Cash                                                          Debit    $ 31,000

   Accumulated Depreciation equipment   Debit    $ 40,800

   Loss on sale of equipment                       Debit    $   5,000

   Equipment                                                  Credit                          $ 76,800                        

To record sale of equipment for $ 31,000 and loss on sale of $ 5,000

Explanation:

Computation of net book value

Cost of equipment                                                                             $ 76,800

Less: Accumulated depreciation                                                     $ 40,800

Net book value                                                                                  $ 36,000      

In first scenario where the equipment is sold of $ 47,000, the differential between the sale value and the net book value is the gain on sale and is credited in the accounting entry.

In the second scenario, where the equipment is sold for $ 36,000, the sale proceeds is exactly equal to the net book value and no gain or loss is recorded.

In the third scenario, the equipment is sold for $ 31,000 and the differential  between the net book value and the sale proceeds is a loss and recorded as a debit in the accounting entry.

answer; /// i do believe the correct answer is (possession utility);