pany purchased a computer that cost $10,000, It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and it was sold at the end of the second year of use for $5,000 cash. The company should record:

pany purchased a computer that cost $10,000, It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and it was sold at the end of the second year of use for $5,000 cash. The company should record:

Name: A company purchased a computer that cost $10,000, It had an estimated
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Description: A company purchased a computer that cost $10,000, It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and it was sold at the end of the second year of use for $5,000 cash. The com

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 11MCQ

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Jay sold three items of business equipment for a total of 300,000. None of the equipment was appraised to determine its value. Jays cost and adjusted basis for the assets are as follows: Jay has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth 300,000 to the buyer in this arms length transaction. How should Jay allocate the sales price and figure the gain or loss on the sale of the three assets?
LO.3 Seojun acquired an activity several years ago, and in the current year, it generates a loss of 50,000. Seojun has AGI of 140,000 before considering the loss from the activity. If the activity is a bakery and Seojun is not a material participant, what is his AGI?
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JT Enterprises decides to scrap its old widget-making machine, which has a book value of $8,600. The salvage company pays JT $8,700 for the machine. How should JT record this disposition? a.) as a $100 loss b.) as a $100 gain c.) as an $8,600 loss d.) as an $8,700 gain
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