On 1 January 2011, Y Ltd purchased a new machine for $500,000. Please need answer the general accounting question On 1 January 2011, Y Ltd purchased a new machine for $500,000. Theestimated scrap value of the machine is $20,000. The machine is depreciatedstraight-line over its useful life of 6 years. On 31 December 2012, Y Ltd soldthe machine for $400,000 to a director of the company.The gain or loss on sale is:a. Gain on sale $60,000.b. Loss on sale $100,000.c. Loss on sale $80,000.d. There is no gain or loss.

Step 1: Define Depreciation MethodThe depreciation method allows charging the expense on an asset…

Answered: On 1 January 2011, Y Ltd purchased a…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 32CE

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
Taylor Company purchased a machine for $9,800 on January 1, 2016. The machine has beendepreciated using the straight-line method assuming it has a five-year life with a $1,400residual value. Taylor sold the machine on January 1, 2018, for $7,600.Q7-62. What gain or loss should Taylor record on the sale?a. Gain, $800b. Loss, $1,160c. Loss, $520d. Gain, $1,160
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What was the gain or loss on sale?
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