Branson Equipment Co. uses a calendar year and the straight-line depreciation method. On December 31, 2021, after adjusting entries were posted, Branson Equipment Co. sold a machine that was originally purchased on January 1, 2018. • • Historical cost of the machine = $25,000 Salvage value assumed = $2,000 • • Original estimated life = 5 years Depreciation method = Straight-line • Selling price = $6,000 Using this information, how much should be recorded on December 31 for the Gain or (Loss)?

Branson Equipment Co. uses a calendar year and the straight-line depreciation method. On December 31, 2021, after adjusting entries were posted, Branson Equipment Co. sold a machine that was originally purchased on January 1, 2018. • • Historical cost of the machine = $25,000 Salvage value assumed = $2,000 • • Original estimated life = 5 years Depreciation method = Straight-line • Selling price = $6,000 Using this information, how much should be recorded on December 31 for the Gain or (Loss)?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...

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On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
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