TLC -084 CSecure 1 btpsu/inewconnect Chapter Eleven Homework 5 0 Required inform
ID: 2517751 • Letter: T
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TLC -084 CSecure 1 btpsu/inewconnect Chapter Eleven Homework 5 0 Required information Pert t of 3 The following information applies to the questions displayed below n year O Longworth Partnership purchased a machine for $40,000 to use in ts business In year 3, Longworth sold the machine S35000 Between the date of purchase and the date of the sale, Longworth depreciated the machine by 522.000. (Loss emounts should be indicated by a minus sign. Leave no answer biank. Enter zero if applicable) n. What is the amount and character of the gan (loss) Longworth well recognize on the sale? Nest ? PRINTER DExplanation / Answer
a). Cost of the machine $40000
Less: Depreciation till date $22000
Written Down Value (A) $18000
Sale value of the machine (B) $35000
Gain on Sale of Machine A-B $17000 (Revene profit)
b) If the machine is sold for $45000
Cost of the machine $40000
Less: Depreciation till date $22000
Written Down Value (A) $18000
Sale value of the machine (B) $45000
Gain on Sale of Machine A-B $27000
In this situation , the sale value in excess of the cost of machine ie ($45000-$40000) $5000 will be capital profit while the balance of ($27000-$5000) $22000 will be revenue profit
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