intro to accounting need help calculating the gain MBrief Exercise 9.6 D ezto.mh

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intro to accounting

need help calculating the gain

MBrief Exercise 9.6 D ezto.mheducation.c ezto.mheducation.com/hm.tpx?-0.5953702684777084 1446517065106 1. 100 points 1.00 points Alexander Company purchased a piece of equipment for $14,000 and depreciated it for three years over a five year estmated lide with an expected residual value at the end of five years of third year, Alex decided to upgrade to equipment with increased capacity and sold the original piece of equipment for $7,500 f $2,000. At the end of the l Cakculate the gain or loss on the disposal at the end of the third year Gain on sale by Gain

Explanation / Answer

Depreciation every year = Cost - Residual value / useful life

= 14000-2000/5 i.e 2400

Book value = 14000-2400*3 i.e 6800

Gain on sale = 7500-6800 i.e 700

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