Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to produce 490,000 units over the next five years and have a residual value of $40,000. The equipment was sold for $199,100 part way through 2024. Actual production in each year was: 2022 = 70,000 units; 2023 = 111,000 units; 2024 = 56,000 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 $235,100, 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 Required 4 Calculate the gain or loss on the sale. Note: Do not round intermediate calculations. Gain on sale of equipment 46007945 A Required 2 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to produce 490,000 units
over the next five years and have a residual value of $40,000. The equipment was sold for $199,100 part way through 2024. Actual
production in each year was: 2022 = 70,000 units; 2023 = 111,000 units; 2024 = 56,000 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 $235,100, 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
Required 4
Calculate the gain or loss on the sale.
Note: Do not round intermediate calculations.
Gain on sale of equipment
Required 2 >
Transcribed Image Text:Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to produce 490,000 units over the next five years and have a residual value of $40,000. The equipment was sold for $199,100 part way through 2024. Actual production in each year was: 2022 = 70,000 units; 2023 = 111,000 units; 2024 = 56,000 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 $235,100, 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 Required 4 Calculate the gain or loss on the sale. Note: Do not round intermediate calculations. Gain on sale of equipment Required 2 >
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