Warhol Enterprises purchased a spray painter at the beginning of 2018 at a cost of $150,000. Warhol spent $500 to bring it to the current location. Warhol estimated that the spray painter would last five years and have a residual value of $30,000. The company decided to use straight-line depreciation. Two years later, at the end of 2019, Warhol sold the spray painter for $100,000. a. Calculate the book value of the spray painter at the end of 2018 and the end of 2019, prior to its sale. b. Calculate the gain or loss on the sale of the spray painter. c. Calculate the income statement effect, assuming that Warhol decided to give the spray painter to a charitable foundation

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Warhol Enterprises purchased a spray painter at the beginning of 2018 at a cost of $150,000.
Warhol spent $500 to bring it to the current location. Warhol estimated that the spray painter
would last five years and have a residual value of $30,000. The company decided to use straight-line depreciation. Two years later, at the end of 2019, Warhol sold the spray painter for $100,000.
a. Calculate the book value of the spray painter at the end of 2018 and the end of 2019, prior to
its sale.
b. Calculate the gain or loss on the sale of the spray painter.
c. Calculate the income statement effect, assuming that Warhol decided to give the spray
painter to a charitable foundation

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