Calculate the gain or loss on each of the following dispositions of property, pl
ID: 2459845 • Letter: C
Question
Calculate the gain or loss on each of the following dispositions of property, plant and equipment. Place your answer in the highlighted space provided. A loss should be indicated by parentheses ( ), or a minus - sign.
Furniture Sold
Original cost of the furniture
14,000
Accumulated depreciation on the furniture
10,200
Fair market value of the replacement furniture
17,500
Sales price of the furniture sold
3,600
Gain or loss recognized
Pick-up truck exchanged for a new pick-up truck
Original cost of the truck
25,500
Accumulated depreciation of truck
23,000
Sticker price of new truck
29,000
Fair market value of the new truck
26,000
Cash paid to the dealer
23,500
Gain or loss recognized
Equipment destroyed by fire
Original cost of the equipment
17,500
Accumulated depreciation of equipment
3,500
Insurance proceeds
15,000
Cost to replace equipment
23,000
Gain or loss recognized
Furniture Sold
Original cost of the furniture
14,000
Accumulated depreciation on the furniture
10,200
Fair market value of the replacement furniture
17,500
Sales price of the furniture sold
3,600
Gain or loss recognized
Pick-up truck exchanged for a new pick-up truck
Original cost of the truck
25,500
Accumulated depreciation of truck
23,000
Sticker price of new truck
29,000
Fair market value of the new truck
26,000
Cash paid to the dealer
23,500
Gain or loss recognized
Equipment destroyed by fire
Original cost of the equipment
17,500
Accumulated depreciation of equipment
3,500
Insurance proceeds
15,000
Cost to replace equipment
23,000
Gain or loss recognized
Explanation / Answer
Furniture : WDV as on Date of sale = 14000-10200 = 3800
Amount of Sold : 3600
loss on sale of Furniture ; 3600-3800 = (200)
Exchange of truck : WDV as on date of sale : 25500-23000 =2500
amount of sale = 26000-23500=2500
loss / profit = 2500-2500= Zero (0)
Equipment Destroyed by fire : WDV as on date of sale : 17000-3500= 13500
profit 15000-13500 = 1500
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