On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the above

On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Copper Corporation sold machinery for $47,000 on December 31, 2021. The machinery had been purchased on January 2, 2018, for $60,000 and had an adjusted basis of $41,000 at the date of the sale. For 2021, what should Copper report? a.Ordinary income of $6,000. b.A § 1231 gain of $6,000. c.A § 1231 gain of $3,000 and $3,000 of ordinary income. d.A § 1231 gain of $6,000 and $3,000 of ordinary income.
ABC Ltd acquired an item of machinery on 1 July 2021 for a cost of $120 000 When the asset was acquired it was considered that the asset would have a useful life to the entity of five years, after which time it would have no residual value It was considered that the pattern of economic benefits would best be reflected by applying the sum-of-digits method Contrary to expectations, on 1 July 2023 the asset was sold for $80 000 Required 1. What was the profit on disposal on 1 July 2023 and what are the journal entries to record the disposal? (Use sum of digit depreciation method) 2. Prepare Depreciation Schedule for the period.
A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31, 2018. The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded. The company should recognize a: Multiple Choice $100,000 loss on disposal. $40,000 loss on disposal. $40,000 gain on disposal. $25,000 loss on disposal.
Godo
← Gulfcoast, Inc. purchased a van on January 1, 2019, for $830,000. Estimated life of the van was five years, and its estimated residual value was $94,000. Gulfcoast uses the straight-line method of depreciation. Calculate the book value of the van at the end of 2019. OA. $778,125 B. $682,800 C. $674,375 OD. $736,000
On January 1, 2016, Rexford Company purchased a drilling machine for $11,500. The machines has an estimated useful life of 4 years and a salvage value of $200. Given this information, if Rexford uses double-declining-balance method of depreciation, and sells the machine on December 31, 2017, for $3,000 cash. Then how much will be gain or loss on disposal of this asset? $ 2,750 loss $ 1,800 loss $1,562 gain $ 125 gain
Can you also show me how to do this one? 12. XYZ Co. purchased new trucks at the beginning of 2018 for $600,000. The trucks had an estimated life of four yearsand an estimated residual value of $50,000. They use straight-line depreciation. At the beginning of 2019, XYZ sold thetrucks for $480,000 and purchased new trucks for $700,000.A. Calculate book value of the trucks at the end of 2018.B. Calculate the gain (loss) on the sale of the trucks at the beginning of 2019. Calculate the amount and indicate if it is a gain or a loss.
On December 31, 2020, Listach Inc. sold a used industrial crane for $600,000 cash. The original cost of the crane was $5.0 million and its accumulated depreciation equaled $4.2 million on December 31, 2020. What is the gain or loss from the December 31, 2020 equipment sale? Group of answer choices A)$800,000 gain B)$800,000 loss C)$200,000 loss D)$200,000 gain E)None of the above
Newman Co. purchased CNC router cutting and engraving machinery at a cost of $320,000 in January 2019. The company's estimated useful life of this high tech equipment is 5 years, and the estimated salvage value is $48,000. Using the straight-line method, the net book value at December 31, 2021, after the third year of the machinery's life, would be: Multiple Choice $128,000. $163,200. $211,200. $156,800.
Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, for $40,500. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $3,000. Swann uses the straight-line method of depreciation. At December 31, 2018, the truck had a book value of $10,500. Required: 1. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for: a. $9,875 b. $7,275 2. How should the gain or loss on disposal be reported on the income statement? 3. Assume that Swann uses IFRS and sold the truck for $9,875. In addition, Swann had previously recorded a revaluation surplus related to this machine of $5,000. What journal entries are required to record the sale?