A machine purchased by the Bee Buzzsaw Company originally cost $245,000. Delivery and installation charges amounted to $5000. The declared salvage value was $25,000; useful life of the machine was 12 years. At the end of Year 4, the company changed its product mix and found that it no longer needed the machine. One of its competitors agreed to buy the machine for $90,000. Compute the book value of the machine at end of Year 4 and determine the loss or gain of depreciation on the sale using: a. Straight-Line Method
A machine purchased by the Bee Buzzsaw Company originally cost $245,000. Delivery and installation charges amounted to $5000. The declared salvage value was $25,000; useful life of the machine was 12 years. At the end of Year 4, the company changed its product mix and found that it no longer needed the machine. One of its competitors agreed to buy the machine for $90,000. Compute the book value of the machine at end of Year 4 and determine the loss or gain of depreciation on the sale using: a. Straight-Line Method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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can you please show me the sol'n
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Transcribed Image Text:A machine purchased by the Bee Buzzsaw Company originally cost $245,000.
Delivery and installation charges amounted to $5000. The declared salvage
value was $25,000; useful life of the machine was 12 years. At the end of Year
4, the company changed its product mix and found that it no longer needed the
machine. One of its competitors agreed to buy the machine for $90,000.
Compute the book value of the machine at end of Year 4 and determine the
loss or gain of depreciation on the sale using:
a. Straight-Line Method
b. Sinking fund at 8%
c. Double Declining Balance Method
d. Sum-of-the-Years-Digits Method
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