Respuesta :
Answer:The gain is $5,700
Explanation:
Cost - Salvage value / useful life
Cost=$58,000 Salvage value = $5,000 Useful life = 10 years
58,000 - 5,000/10 = 5,300
The yearly depreciation = $5,300
$
1st year cost. 53,0000
Depreciation. ( 5,300)
2nd year cost. 47,700
Depreciation. (5,300)
3rd year cost. 41,700
Depreciation. (5,300)
4th year cost. 36,400
Depreciation. (5,300)
Total. 31,100
The net book value of the machine after 4 years = $ 31,100
To calculate the Accumulated Depreciation
= Yearly depreciation x Years the machine is sold
= Yearly depreciation = $5,300. Years the machine was sold = 4
5,300× 4 = 21,200
Accumulated depreciation = $21,200
To calculate the cost of selling the machine
Initial cost - Accumulated depreciation
Initial cost = $58,000 Accumulated depreciation = $21,200
58,000 - 21,200 = 36,800
The machine will be sold for $36,800zAccounting entry will be
Machine Cost.
Dr Cr
$ $
Ist year Cost. 58,000
4th year. Disposal.
58,000
58,000
Accounting entry will be
Dr Machine Cost. Cr
$
$
Ist year Cost. 58,000
4th year. Disposal. 58,000
58,000
58,000
Accounting entry will be
Dr Machine Cost. Cr
$
$
Ist year Cost. 58,000
4th year. Disposal. 58,000
58,000
Accounting entry will be
Dr Machine Cost. Cr
$
$
Ist year Cost. 58,000
4th year. Disposal. 58,000
58,000
58,000
Depreciation. Account
Cr
$
$
4th year. Disposal. 21,200
I st year profit and loss 5,300
2nd year profit and loss. 5,300
3rd year. Profit and loss 5,300
4th year profit and loss. 5,300
21,200
21,200
Dr Disposal Account. Cr
$
$
Ist year machine cost 58,000
4th year cash. 31,100
Profit and Loss (Gain) 5,700
Accumulated depreciation 21,200
58,000
58,000
The gain or loss in each scenario is determined as follows:
Scenario Gain or Loss Amount
1. Sold for $37,000 Gain $200 ($37,000 - $36,800)
2. Sold for $36,800 No Gain, No Loss $0 ($36,800 - $36,800)
3. Sold for $28,000 Loss -$8,800 ($28,000 - $36,800)
Data and Calculations:
Cost of machine = $58,000
Estimated salvage value = $5,000
Depreciable amount = $53,000 ($58,000 - $5,000)
Estimated useful life = 10 years
Depreciation method = straight-line
Annual depreciation expense = $5,300 ($53,000/10)
Accumulated depreciation after four years = $21,200 ($5,300 x 4)
Net book value of machine after four years = $36,800 ($58,000 - $21,200)
Thus, the gain or loss on sale of the machine depends on the difference between the net book value of the machine after four years and the realized sales revenue.
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