Mercury Incorporated purchased equipment in 2022 at a cost of $212,000. The equipment was expected to produce 560,000 units over the next five years and have a residual value of $44,000. The equipment was sold for $112,500 part way through 2024. Actual production in each year was: 2022 = 78,000 units; 2023 = 124,000 units; 2024 = 63,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Calculate the gain or loss on the sale. Prepare the journal entry to record the sale. Assuming that the equipment was instead sold for $145,500, calculate the gain or loss on the sale. Prepare the journal entry to record the sale in requirement 3.
Mercury Incorporated purchased equipment in 2022 at a cost of $212,000. The equipment was expected to produce 560,000 units over the next five years and have a residual value of $44,000. The equipment was sold for $112,500 part way through 2024. Actual production in each year was: 2022 = 78,000 units; 2023 = 124,000 units; 2024 = 63,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Calculate the gain or loss on the sale. Prepare the journal entry to record the sale. Assuming that the equipment was instead sold for $145,500, calculate the gain or loss on the sale. Prepare the journal entry to record the sale in requirement 3.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...
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Mercury Incorporated purchased equipment in 2022 at a cost of $212,000. The equipment was expected to produce 560,000 units over the next five years and have a residual value of $44,000. The equipment was sold for $112,500 part way through 2024. Actual production in each year was: 2022 = 78,000 units; 2023 = 124,000 units; 2024 = 63,000 units. Mercury uses units-of-production
- Calculate the gain or loss on the sale.
- Prepare the
journal entry to record the sale. - Assuming that the equipment was instead sold for $145,500, calculate the gain or loss on the sale.
- Prepare the journal entry to record the sale in requirement 3.
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