Donavon Company purchased a truck on January 1, 2016, at a cost of $54,000. The truck had an estimated life of 5 years and an estimated residual value of $20,000. Donavon's year- end is December 31st. Assuming Donavon uses the straight-line method and the company sold the machine on July 1, 2018, for $24,000, determine the gain/loss on disposal. a. $16,400 gain b. $13,000 loss c. $4,000 gain d. $16,400 loss

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 9MCQ: Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a...
icon
Related questions
Question
100%

Need answer the accounting question Do fast and step by step calculation

Donavon Company purchased a truck on January 1, 2016, at
a cost of $54,000. The truck had an estimated life of 5 years
and an estimated residual value of $20,000. Donavon's year-
end is December 31st.
Assuming Donavon uses the straight-line method and the
company sold the machine on July 1, 2018, for $24,000,
determine the gain/loss on disposal.
a. $16,400 gain
b. $13,000 loss
c. $4,000 gain
d. $16,400 loss
Transcribed Image Text:Donavon Company purchased a truck on January 1, 2016, at a cost of $54,000. The truck had an estimated life of 5 years and an estimated residual value of $20,000. Donavon's year- end is December 31st. Assuming Donavon uses the straight-line method and the company sold the machine on July 1, 2018, for $24,000, determine the gain/loss on disposal. a. $16,400 gain b. $13,000 loss c. $4,000 gain d. $16,400 loss
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT