Need help with this question On December 31, Strike Company hasdecided to sell one of its batting cages. Theinitial cost of the equipment was $215,000 withaccumulated depreciation of $185,000.Depreciation has been taken up to the end ofthe year. The company found a company thatis willing to buy the equipment for $55,000.What is the amount of the gain or loss on thistransaction?

Step 1: Introduction to the Asset DisposalAsset disposal is the process of selling of fixed asset…

Answered: On December 31, Strike Company has…

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 44P

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Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
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.
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Hauswirth Corporation sold (or exchanged) a warehouse in year O. Hauswirth bought the warehouse several years ago for $103,500, and it has claimed $41,600 of depreciation expense against the building. Note: Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Round your final answers to the nearest whole dollar amount. Required: a. Assuming that Hauswirth receives $76,200 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $76,200, compute Hauswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Hauswirth receives $21,000 in cash in year 0 and a $87,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year O and in year 1. Complete this…

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