2 Blue inc. Purchases and assets for $100,000. The asset has a useful life of ten years and no salvage value. In year 6, Blue inc. sold the assets for $60,000. What is the reported gain or loss for this transaction assuming straight-line depreciation. Gain Loss Gain 20,000

2 Blue inc. Purchases and assets for $100,000. The asset has a useful life of ten years and no salvage value. In year 6, Blue inc. sold the assets for $60,000. What is the reported gain or loss for this transaction assuming straight-line depreciation. Gain Loss Gain 20,000

Name: 2 Blue inc. Purchases and assets for $100,000. The asset has a useful
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Description: 2 Blue inc. Purchases and assets for $100,000. The asset has a useful life of ten years and no salvagevalue. In year 6, Blue inc. sold the assets for $60,000. What is the reported gain or loss for this transactionassuming straight-line depreciation.

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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2 Blue inc. Purchases and assets for $100,000. The asset has a useful life of ten years and no salvage
value. In year 6, Blue inc. sold the assets for $60,000. What is the reported gain or loss for this transaction
assuming straight-line depreciation.
Gain
Loss
Gain 20,000

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