On January 1, 2016, Horton Inc. sells a machine for $24,800. The machine was ori
ID: 2489960 • Letter: O
Question
On January 1, 2016, Horton Inc. sells a machine for $24,800. The machine was originally purchased on January 1, 2014 for $44,200. The machine was estimated to have a useful life of 5 years and a residual value of $0. Horton uses straight-line depreciation. In recording this transaction:
a gain of $1,720 would be recorded.
a loss of $1,720 would be recorded.
a loss of $19,400 would be recorded.
a gain of $24,800 would be recorded.
On January 1, 2016, Horton Inc. sells a machine for $24,800. The machine was originally purchased on January 1, 2014 for $44,200. The machine was estimated to have a useful life of 5 years and a residual value of $0. Horton uses straight-line depreciation. In recording this transaction:
Explanation / Answer
Selling Price 24800 Purchase price 44200 Depreciation 44200*2/5 17680 Value 26520 Loss 26520-24800 1720 The correct answer is a loss of $1,720 would be recorded
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