Exercise 11-10 (Algo) Disposal of property, plant, and equipment [LO11-2] Mercury Inc. purchased equipment in 2019 at a cost of $340,000. The equipment was expected to produce 440,000 units over the next five years and have a residual value of $32,000. The equipment was sold for $170,900 part way through 2021. Actual production in each year was: 2019 = 63,000 units: 2020 = 100.000 units; 2021 = 50,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $201,900, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3.
Exercise 11-10 (Algo) Disposal of property, plant, and equipment [LO11-2] Mercury Inc. purchased equipment in 2019 at a cost of $340,000. The equipment was expected to produce 440,000 units over the next five years and have a residual value of $32,000. The equipment was sold for $170,900 part way through 2021. Actual production in each year was: 2019 = 63,000 units: 2020 = 100.000 units; 2021 = 50,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $201,900, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Exercise 11-10 (Algo) Disposal of property, plant, and equipment [LO11-2]
Mercury Inc. purchased equipment in 2019 at a cost of $340,000. The equipment was expected to produce 440,000 units over the
next five years and have a residual value of $32,000. The equipment was sold for $170,900 part way through 2021. Actual production
in each year was: 2019 = 63,000 units: 2020 = 100,000 units; 2021 = 50,000 units. Mercury uses units-of-production depreciation, and
all depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss on the sale.
2. Prepare the journal entry to record the sale.
3. Assuming that the equipment was instead sold for $201,900, calculate the gain or loss on the sale.
4. Prepare the journal entry to record the sale in requirement 3.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Calculate the gain or loss on the sale. (Do not round intermediate calculations.)
Required 4
< Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05c29da8-5e07-472c-a295-a56e55cdcfad%2F4fdb92a0-bf9a-44fb-a47d-c7301c839829%2Fvbt7j9r_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 11-10 (Algo) Disposal of property, plant, and equipment [LO11-2]
Mercury Inc. purchased equipment in 2019 at a cost of $340,000. The equipment was expected to produce 440,000 units over the
next five years and have a residual value of $32,000. The equipment was sold for $170,900 part way through 2021. Actual production
in each year was: 2019 = 63,000 units: 2020 = 100,000 units; 2021 = 50,000 units. Mercury uses units-of-production depreciation, and
all depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss on the sale.
2. Prepare the journal entry to record the sale.
3. Assuming that the equipment was instead sold for $201,900, calculate the gain or loss on the sale.
4. Prepare the journal entry to record the sale in requirement 3.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Calculate the gain or loss on the sale. (Do not round intermediate calculations.)
Required 4
< Required 1
Required 2 >
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