FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company sold a machine that originally cost $250,000 for $120,000 when
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- ABC Company purchased a machine for $2 million that can produce 3,000,000 products over its useful life. The company estimates that this machine has a salvage value of $200,000. Assume in Year 1, the machine produced 200,000 products. The amount of depreciation that should be recorded for the first year is: a. $135 000 b. $120 000 c. $58 000 d. $48 900arrow_forwardArlington Company sold equipment for $90,000 cash. The equipment had an original cost of $180,000 and accumulated depreiation of $70,000 as of the date of sale. Which of the following would NOT be included in the entry to record the sale?arrow_forwardThe Bomb Pop Corporation sold ice cream equipment for $18,500. The equipment was originally purchased for $40,000, and depreciation through the date of sale totaled $25,000. 1. What was the gain or loss on the sale of the equipment? on salearrow_forward
- Asaparrow_forwardExactly 10 years ago, Boyditch Professional Associates purchased $100,000 in depreciable assets with an estimated salvage of $10,000. For tax depreciation the SL method with n = 10 years was used, but for book depreciation, Boyditch applied the DDB method with n = 7 years and neglected the salvage estimate. The company sold the assets today for $12,500.a. Compare this sales amount with the book values using SL and DDB methods.b. If a salvage of $12,500 had been estimated exactly 10 years ago, determine the depreciation for each method in year 10.arrow_forwardOn 1/1/X2, Hudson Enterprises decided to sell equipment it had been using in its business for $25,000 cash. The following data are available for the equipment as of the disposal date: Cost $200,000 Original estimated residual value 25,000 Accumulated Depreciation as of 12/31/X1 160,000 Question: How much gain or loss should be recorded on the sale of this asset?Answer: The company should report a _____ (gain or loss) of $ ___arrow_forward
- Lou Lou and Company purchased a piece of machinery 2 years ago for $50,000 and has depreciation to date of $15,000. The fair market value of the asset is $30,000, but the company believes it can achieve $34,000 in net future cash flows from the asset. Costs to dispose of the asset is $200. Assuming the asset is held for use, determine if the asset is impaired. If so, what is the amount of the write-off? The asset is impaired and Lou Lou should record a $1,000 loss on impairment. The asset is impaired and Lou Lou should record a $5,200 loss on impairment. The asset is NOT impaired. The asset is impaired and Lou Lou should record a $5,000 loss on impairment.arrow_forwardJake parchased a $235,000 crane for his constraction business. He sold the crane for $175,000 after taking $115,000 of depreciation. Assume take is What is the amount of gain or loss on the sale?arrow_forwardNgu own equipment that cost 96,500 with accumulated depreciation of 66,000. Ngu asks 35,750 for the equipment but sells it for 33,500. Compute the amount of gains or losses on the salearrow_forward
- A company's old machine that cost $60,000 and had accumulated depreciation of $24,000 was traded in on a new machine having an estimated 20-year life with a fair value of $70,000. The company also paid $50,000 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at: a.$47,000 b.$70,000 c.$86,000 d.$120,000arrow_forwardJason Co purchased a machinery for £100,000 on 1/1/2018. It had an estimated useful life of ten years and it was depreciated using the reducing balance method at a rate of 20%. On 1/1/20 it was decided to change the depreciation method to the straight line. There was no change to the useful life, and no residual value is anticipated. What are the accumulated depreciation and the net book value of the asset for the year ended 31 December 2021?arrow_forwardLawler Clothing sold manufacturing equipment for $16,000. Lawler originally purchased the equipment for $80,000, and depreciation through the date of sale totaled $71,000. What was the gain or loss on the sale of the equipment?arrow_forward
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