turdivant Company owns an executive plane that originally cost $1,280,000. It has recorded straight‑line depreciation on the plane for seven full years, calculated assuming a $160,000 expected salvage value at the end of its estimated 10‑year useful life. Sturdivant sells the plane at the end of the seventh year for $200,000. Calculate the gain or loss on the sale of the plane. (Round your answer to the nearest whole number. If a loss, type a minus sign “-” at the beginning of your answer; do not include a space after the minus sign. Do not include a $ sign.)
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.
Sturdivant Company owns an executive plane that originally cost $1,280,000. It has recorded straight‑line
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