Alexander Company purchased a piece of equipment for $12,000 and depreciated it for three years over a five-year estimated life with an expected residual value at the end of five years of $2,000. At the end of the third year, Alex decided to upgrade to equipment with increased capacity and sold the original piece of equipment for $7,200. Calculate the gain or loss on the disposal at the end of the third year.

Question

Alexander Company purchased a piece of equipment for $12,000 and depreciated it for three years over a five-year estimated life with an expected residual value at the end of five years of $2,000. At the end of the third year, Alex decided to upgrade to equipment with increased capacity and sold the original piece of equipment for $7,200. Calculate the gain or loss on the disposal at the end of the third year.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Depreciation Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: P3-58A. (Learning Objective 1: Explain how accrual accounting differs from cash-basisaccounting) Ber...

A: Cash Basis Accounting: The cash basis of accounting recognizes revenues when cash is received, and e...

Q: Unity University Final Exam for Management And Financial Accounting Consider zagol manufacturing wh...

A: The point that represents a situation of no profit and no loss is termed as the point of break-even....

Q: How important are taxes in the decision to sell a property?

A: Taxes: The compulsory financial charge or any other kind of levy that is forced on the payers of tax...

Q: Jenna and Matt Wilder are completing their second year operating Mountain High, a downhill ski area ...

A: Given: Amount on net loss = $ 10000 Amount on a year-end asset in total = $80000 Amount on loss on f...

Q: You are calculating the present value of $5,000 that you will receive at the end of everyyear for th...

A: Answer: B. Present Value of Ordinary Annuity of​ $1  

Q: Sophia's Restaurant served 6,700 meals last quarter. Sophia recorded the following costs with those ...

A: Total cost = Fixed cost + variable cost

Q: Define retained earnings

A: Financial Accounting:   It refers to the process of recording the financial transactions of the busi...

Q: 1.Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it in $1,500 on December 1994. Giv...

A: Introduction: s per Income Tax Act ,1977 – Australia, Capital Gain Tax (CGT) will be applicable on C...

Q: Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $662,500. The equ...

A: Depreciation is a reduction in the value of assets over time due to normal wear and tear, obsolescen...

Q: Accounting Question

A: Definition: Taxable income: Income that is computed after all allowable or permissible deductions ar...

Q: The “Wise Dimension” owned by Mr. Cousins. Wise Dimension imports office supplies from all over the ...

A: A journal entry is made to record the financial transaction in the books of accounts. Adjusting entr...

Q: how to correct a The Debtors control column in the debtors journal was “undercast”.

A: Entry will be Debtors control A/c _____ Dr      To sales

Q: Where opening inventory of 50 units of finished goods are valued at $10 each and the average unit co...

A: Among the given options, FIFO and Weighted average are the methods of inventory valuation. Under FIF...

Q: Whyville Corporation obtained its charter from the state in January that authorized 500,000 sharesof...

A: 1. Indicate the effects of each transaction on the accounting equation. Working notes:

Q: Explain why some companies choose not to pay cash dividends. Why do investors purchase stock in comp...

A: Cash dividends: The amount of cash provided by a corporation out of its distributable profits to it...

Q: Board Company has a foreign subsidiary that began operations at the start of 2017 with assets of 144...

A: Given:     January 1, 2017 (start of business) $0.81 March 1, 2017 0.79 Weighted a...

Q: Explain discretionary access privileges.

A: In discretionary access privilege, the proprietor of the item indicates which subjects can get to th...

Q: Apples & Oranges Inc. is trying to become more efficient in shipping goods. It is experimenting with...

A: Strategic Initiatives: Strategic initiatives refer to the process implemented by the organization to...

Q: On January 17, Papa’s Pizza signs a contract with Bug Zappers for exterminating services related to ...

A: Matching principle: According to this principle, the expense should be recognized when it is actuall...

Q: Jackson Company had the following information in 2018:Accounts receivable 12/31/18.....................

A: Allowance for doubtful accounts: This is a contra asset account to the accounts receivable account t...

Q: Accounting Question

A: Definition: Production Cost Report:  A report which gives information about the total units produced...

Q: Hello question is attached, thanks.

A: Click to see the answer

Q: On January 1, Connaught Company purchased 40 percent of the outstanding voting shares of London Comp...

A: 1. Prepare the journal entries for the year.

Q: If bonds are issued at a discount and the effective-interest method is used, the amount ofinterest e...

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universitie...

Q: Define the term Retail Terminology.

A: Accounting:   Accounting is a system, or a process of collecting and organizing economic transaction...

Q: Total cash inflow in the operating section of the statementof cash flows should include which of the...

A: Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and cas...

Q: Please assist with : S-13 requirement #1

A: Given: Amount paid by Decca publishing = $ 230,000 Amount of total assets = $ 130,000 Amount of tota...

Q: Sandusky Corporation purchased 3,000 shares of its own $1 par value common stock for$143,000. As a r...

A: Stockholders' equity is the aggregate sum of capital given to an organization by its investors in re...

Q: how to correct a credit invoice (issued by the business) has not been recorded at all?

A: When customers return goods due to various reasons like damaged goods within the warranty period, pu...

Q: how to declare the dividend of a business

A: Proprietors and speculators in independent companies get an incentive from their possession stakes t...

Q: HARDA Fashion sells ready-to-wear fashion clothes to teenagers. The company has a 20-store chain con...

A: 1 and 2 Strength 1) - The sales department consists of young employees who are paid hourly basis plu...

Q: Define contingent liability. Provide three common examples.

A: Click to see the answer

Q: Complete the common-size and common-base year financial statements [Income Statement (IS) and Balanc...

A: The statement of the balance sheet is calculated as per common size by dividing every line item by t...

Q: This calculation determines profitability or growth potential of an investment, expressed as a perce...

A: Given: The expression of the growth potential of investment is given and to find out the point at wh...

Q: Spielberg Company’s general ledger shows a checking account balance of $22,970 on July 31, 2021. The...

A: Bank Reconciliation Statement is a statement prepared to reconcile the difference between the balanc...

Q: In 2013, Macy’s reported cost of goods sold of $16.5 billion, ending inventory for 2013 of$5.3 billi...

A: cost of shrinkage = ending inventory for 2013 had there been no shrinkage - actual ending inventory ...

Q: Define amortization

A: Intangible Assets: These are the long-term assets having no physical existence. However, the benefit...

Q: Yolo Windows, a manufacturer of windows for commercial buildings, reports the following account info...

A: Click to see the answer

Q: how to correct a Notification has been received that the outstanding balance on one of the debtors s...

A: Introduction:   Rectification entry has to be passed when any error has been made in the books of ac...

Q: Calculate the following profitablity leverage management ratios a. Gross profit margin b. Net profit...

A: Profitability leverage management ratios   a. Gross profit Margin: [Revenue-cost of goods sold]/Reve...

Q: I. A tight budget may create ______. Why? a. budgetary slack b. discouragement c. a flexible budge...

A: Budget is a financial plan prepared to forecast income and expenses for a definite period It is prep...

Q: Costs of $5,000 were incurred to acquire goods and make them ready for sale. The goods were shipped ...

A: Buyer’s total cost of merchandise inventory = Cost of goods purchased + Freight in + Additional nece...

Q: After all the ledgers had been drawn up, the following differences and errors were identified. Indic...

A: Credit invoice is issued by the selling entity to the customer or buying entity for the value of goo...

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an organiza...

Q: Buffalo BBQ Restaurant is trying to become more efficient in training its chefs. It is experimenting...

A: (1) Average hours of employee training per chef: Program A: Employee Hours of basic training Hour...

Q: Entries can draw from this partial chart of accounts: Interest Receivable; Prepaid Insurance; Accumu...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid r...

A: The journals are: In the books of Sweet Catering Journals Date Particulars LF Amt(Dr.)($) Amt...

Q: All of the following are controls for cash received over the counter excepta. a printed receipt must...

A: Correct option to the above question is d. The sales clerk must have access to the cash register tap...

Q: What types of matters would result in the auditors’ report being modified for consistency?

A: Click to see the answer

Q: What were the standard machine-hours allowed for the actual number of units produced?

A: Standard hour:   A standard hour is a concept of performance measurement used by an organization in ...