# Computing Depreciation, asset book value and gain or loss on asset sale Palepu Company owns and operates a delivery van that originally cost \$27,200. Straight-line depreciation on the van has been recorded for 3 years, with a \$2,000 expected salvage value at the end of its estimated 6 years useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van. a. Compute the net book value of the van on the sale date.b. Compute the gain or loss on sale of the van if its sales price is for:1. Cash equal to book value of van2. \$15,000 cash3. \$12,000 cash

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Asked Nov 21, 2019
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Computing Depreciation, asset book value and gain or loss on asset sale
Palepu Company owns and operates a delivery van that originally cost \$27,200.
Straight-line depreciation on the van has been recorded for 3 years, with a \$2,000 expected salvage value at the end of its estimated 6 years useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van.
a. Compute the net book value of the van on the sale date.
b. Compute the gain or loss on sale of the van if its sales price is for:
1. Cash equal to book value of van
2. \$15,000 cash
3. \$12,000 cash

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Step 1

a.

Calculate the net book value of t...

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