Bob's Construction Company sold a bobcat (equipment) to another construction company for $81,000 cash on January 1, 2019. The bobcat was originally purchased on January 1, 2017 for $200,000 and had an expected useful life of 7 years with no salvage value. Under the straight line depreciation method, what is the loss on the sale of the equipment on January 1, 2019? Assume that depreciation has been recorded through December 31, 2018 and enter a positive number for the loss.

Bob's Construction Company sold a bobcat (equipment) to another construction company for $81,000 cash on January 1, 2019. The bobcat was originally purchased on January 1, 2017 for $200,000 and had an expected useful life of 7 years with no salvage value. Under the straight line depreciation method, what is the loss on the sale of the equipment on January 1, 2019? Assume that depreciation has been recorded through December 31, 2018 and enter a positive number for the loss.

Name: Bob's Construction Company sold a bobcat (equipment) to another const
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Description: Bob's Construction Company sold a bobcat (equipment) to another construction company for $81,000 cash on January1, 2019. The bobcat was originally purchased on January 1, 2017 for $200,000 and had an expected useful life of 7years with no salvage va

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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Question

Bob's Construction Company sold a bobcat (equipment) to another construction company for $81,000 cash on January
1, 2019. The bobcat was originally purchased on January 1, 2017 for $200,000 and had an expected useful life of 7
years with no salvage value. Under the straight line depreciation method, what is the loss on the sale of the equipment
on January 1, 2019? Assume that depreciation has been recorded through December 31, 2018 and enter a positive
number for the loss.

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