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Calculate the amount of the loss

Calculate the amount of the loss

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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On February 1, 2006, Mason Company purchased a building for $359,000. The building was assigned a useful life of forty years and a salvage value of $11,000. XYZ Company uses the straight-line depreciation method to calculate depreciation on its long-term assets. The building was sold for $121,000 cash on August 1, 2029. Calculate the amount of the loss recorded on the sale. Do not enter your answer with a minus sign in front of your number.
Transcribed Image Text:On February 1, 2006, Mason Company purchased a building for $359,000. The building was assigned a useful life of forty years and a salvage value of $11,000. XYZ Company uses the straight-line depreciation method to calculate depreciation on its long-term assets. The building was sold for $121,000 cash on August 1, 2029. Calculate the amount of the loss recorded on the sale. Do not enter your answer with a minus sign in front of your number.
Expert Solution
Step 1

DETAILS GIVEN IN THE QUESTION,

Date of purchase  = 01/02/2006

purchase value      = $359,000

useful life               = 40 years

salvage value         = $11,000

method of depreciation = straight line method

sale value           = $121,000

date of sale = 01/08/2029

number of years building held = 23.5 years (01/02/2006 -01/08/2029)

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