SPECIAL ACCOUNTS AND ENTRIES 177 



Cash $110.00 



Equipment $110.00 



If the same equipment were sold for 10% cash down and 

 a note for the balance, the entry would be : 



Cash $11.00 



Notes Receivable 99 . 00 



Equipment $110 . 00 



Presuming that the book value of the five articles sold is 

 $150, an entry is made as follows : 



Loss on Auction Sale .... $40 . 00 



Equipment $40 .00" 



This entry reduces Equipment account to an amount 

 representing the value of the equipment still on hand, and 

 at the same time shows the loss due to the sale at auction. 



The Loss on Auction Sale account is debited with loss 

 from other classes of property also. For example, if five 

 cows are sold at a price aggregating $35 below their inven- 

 tory or book value, an entry is made to show the result in 

 this way: 



Loss on Auction Sale .... $35 . 00 



Cattle $35.00 



Considering the last two entries above as being the only 

 ones affecting the Loss on Auction Sale account, the entry 

 to close the latter account is: 



Loss and Gain $75.00 



Loss on Auction Sale $75 . 00 



This entry transfers all losses due to the special auction 

 sale direct to Loss and Gain account rather than permitting 

 them to appear in the several property accounts at the 

 close of the year. If they appeared, in the property ac- 



