Answered: On December 31, Iron bolt Athletics… | bartleby

CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 59P

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Question

Can you solve this general accounting problem using appropriate accounting principles?

On December 31, Iron bolt Athletics decided to sell one
of its gym treadmills. The initial cost of the equipment
was $120,000, with accumulated depreciation of
$95,000. Depreciation has been recorded up to year-
end. The company found a buyer willing to purchase
the equipment for $18,000.
What is the amount of gain or loss on this transaction?

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On December 31, Sawyer Corporation decided to sell one of its manufacturing machines. The initial cost of the equipment was $425,000 with accumulated depreciation of $285,000. Depreciation has been taken up to the end of the year. The company found a buyer willing to purchase the equipment for $95,000. What is the amount of the gain or loss on this transaction?
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On February 1, 2006, Mason Company purchased a building for $359,000. The building was assigned a useful life of forty years and a salvage value of $11,000. XYZ Company uses the straight-line depreciation method to calculate depreciation on its long-term assets. The building was sold for $121,000 cash on August 1, 2029. Calculate the amount of the loss recorded on the sale. Do not enter your answer with a minus sign in front of your number.
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