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Venkat Engineering decided to dispose of his old industrial evaporator and upgrade to a new model. He had purchased the old evaporator on January 1, 2012 for $12,700. There was no salvage/residual value and the useful life Venkat had used was 5 years. Venkat depreciated his machinery using a Straight Line basis. On December 31, 2016, Venkat talked Chris into paying him $625 for the above referenced equipment. a) Calculate the Book Value at time of sale $ b) Calculate Venkat's gain or loss on this sale? Enter a loss as a negative value. c) Journalize this sale on Venkat's books on December 31, 2016. Date Dec 31 Description Debit Credit

Venkat Engineering decided to dispose of his old industrial evaporator and upgrade to a new model. He had purchased the old evaporator on January 1, 2012 for $12,700. There was no salvage/residual value and the useful life Venkat had used was 5 years. Venkat depreciated his machinery using a Straight Line basis. On December 31, 2016, Venkat talked Chris into paying him $625 for the above referenced equipment. a) Calculate the Book Value at time of sale $ b) Calculate Venkat's gain or loss on this sale? Enter a loss as a negative value. c) Journalize this sale on Venkat's books on December 31, 2016. Date Dec 31 Description Debit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Venkat Engineering decided to dispose of his old industrial evaporator and upgrade to a new model. He had purchased the old evaporator on January 1, 2012 for $12,700. There was no salvage/residual value and the useful life Venkat had used was 5 years. Venkat depreciated his machinery using a Straight Line basis. On December 31, 2016, Venkat talked Chris into paying him $625 for the above referenced equipment. a) Calculate the Book Value at time of sale b) Calculate Venkat's gain or loss on this sale? Enter a loss as a negative value. c) Journalize this sale on Venkat's books on December 31, 2016. Date Dec 31 Description Debit Credit
Transcribed Image Text:Venkat Engineering decided to dispose of his old industrial evaporator and upgrade to a new model. He had purchased the old evaporator on January 1, 2012 for $12,700. There was no salvage/residual value and the useful life Venkat had used was 5 years. Venkat depreciated his machinery using a Straight Line basis. On December 31, 2016, Venkat talked Chris into paying him $625 for the above referenced equipment. a) Calculate the Book Value at time of sale b) Calculate Venkat's gain or loss on this sale? Enter a loss as a negative value. c) Journalize this sale on Venkat's books on December 31, 2016. Date Dec 31 Description Debit Credit
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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