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1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was expected to have a 10-year service life, $4,000 in residual value. Sanchez uses the declining balance (150%) method to calculate depreciation. On November 21, 2020, the equipment was sold for $30,000. Assuming Shay used the full-month, half-year and full-year (beginning of period) conventions, respectively, what amount of gain or loss would be recognized on the sale date? O A) $7,778; $4,080; $4,400 O B) $2,572; $(182); $(10) O C) $3,969; $909; $1,100 O D) $6,572; $3,818; $3,990

1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was expected to have a 10-year service life, $4,000 in residual value. Sanchez uses the declining balance (150%) method to calculate depreciation. On November 21, 2020, the equipment was sold for $30,000. Assuming Shay used the full-month, half-year and full-year (beginning of period) conventions, respectively, what amount of gain or loss would be recognized on the sale date? O A) $7,778; $4,080; $4,400 O B) $2,572; $(182); $(10) O C) $3,969; $909; $1,100 O D) $6,572; $3,818; $3,990

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was expected to have a 10-year service life, $4,000 in residual value. Sanchez uses the declining balance (150%) method to calculate depreciation. On November 21, 2020, the equipment was sold for $30,000. Assuming Shay used the full-month, half-year and full-year (beginning of period) conventions, respectively, what amount of gain or loss would be recognized on the sale date? A) $7,778; $4,080; $4,400 B) $2,572; $(182); $(10) C) $3,969; $909; $1,100 D) $6,572; $3,818; $3,990
Transcribed Image Text:1. Shay Enterprises purchased equipment on March 18, 2018, at a cost of $40,000. The equipment was expected to have a 10-year service life, $4,000 in residual value. Sanchez uses the declining balance (150%) method to calculate depreciation. On November 21, 2020, the equipment was sold for $30,000. Assuming Shay used the full-month, half-year and full-year (beginning of period) conventions, respectively, what amount of gain or loss would be recognized on the sale date? A) $7,778; $4,080; $4,400 B) $2,572; $(182); $(10) C) $3,969; $909; $1,100 D) $6,572; $3,818; $3,990
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