East Mill Pizzeria isclosing its business.It sold its two-year-old pizza ovens toMarco's ItalianRestaurant for$600,000. Originally,East Mill acquired thepizza ovens at a costof $800,000. Theovens had anestimated useful lifeof 10 years, anestimated residualvalue of $50,000,and weredepreciated usingstraight-linedepreciation.Complete therequirements belowfor East Mill Pizzeria.3. What is the gain or loss on thesale of the ovens at the end of thesecond year?

Name: East Mill Pizzeria isclosing its business.It sold its two-year-old pi
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Description: East Mill Pizzeria isclosing its business.It sold its two-year-old pizza ovens toMarco's ItalianRestaurant for$600,000. Originally,East Mill acquired thepizza ovens at a costof $800,000. Theovens had anestimated useful lifeof 10 years, anestimated r

The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Business

Accounting

of Of 10 years, an estimated residual value of $50,000, and were depreciated using straight-line depreciation. Complete the requirements below for East Mill Pizzeria. E. What is the gain or loss on the ale of the ovens at the end of the

of Of 10 years, an estimated residual value of $50,000, and were depreciated using straight-line depreciation. Complete the requirements below for East Mill Pizzeria. E. What is the gain or loss on the ale of the ovens at the end of the

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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East Mill Pizzeria is
closing its business.
It sold its two-year-
old pizza ovens to
Marco's Italian
Restaurant for
$600,000. Originally,
East Mill acquired the
pizza ovens at a cost
of $800,000. The
ovens had an
estimated useful life
of 10 years, an
estimated residual
value of $50,000,
and were
depreciated using
straight-line
depreciation.
Complete the
requirements below
for East Mill Pizzeria.
3. What is the gain or loss on the
sale of the ovens at the end of the
second year?

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