1) A machine that cost $70,480 with a 6-year life and $4,360 residual value was
ID: 2462758 • Letter: 1
Question
1) A machine that cost $70,480 with a 6-year life and $4,360 residual value was purchased January 2, 2015. Compute the yearly depreciation expense using straight-line depreciation.
$________ Per Year
2) On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $217,695.00 with an accumulated depreciation of $206,810.25. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $25,034.93. What is the amount of the gain or loss on this transaction?
Select Correct Answer.
A) Gain of $14,150.18
B) Cannot be determined
C) Gain of $25,034.93
D) Loss Of $14,150.18
3) A fixed asset with a cost of $25,305.00 and accumulated depreciation of $22,774.50 is sold for $4,301.85. What is the amount of the gain or loss on disposal of the fixed asset?
A) $2,530.50 gain
B) $1,771.35 loss
C) $1,771.35 gain
D) $ 2,530.50 loss
4) Computer equipment was acquired at the beginning of the year at a cost of $65,824.00. The computer equipment has an estimated residual value of $3,058.00 and an estimated useful life of 3 years. Determine the 2nd year's depreciation using straight-line depreciation.
A) $22,960.67
B) $20,922.00
C) $41,844.00
D) 21,941.33
Explanation / Answer
1.
Machine value available for depreciation $70,480-$4,360 = $66,120
Depreciation per year = $66,120/6 = $11,020
2.
3.
4.
Computer value available for depreciation $65,824-$3,058 = $62,766
Depreciation per year = $62,766/3 = $20,922
Initial Cost 2,17,695.00 Less: Accumulated Depreciation -2,06,810.25 Book value of the assets 10,884.75 Selling price 25,034.93 Less: Book Value of the assets -10,884.75 Gain will be 14,150.18Related Questions
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