REVIEW PROBLEM: SALE OF PROPERTY, PLANT AND EQUIPMENTThe 1. M. Stoned Company acquired a machine from the Mickey Lobe Corporation on January 1, 20A0.The purchase price of the machine was $100,000, which did not include the 6% sales tax. Installationand delivery charges amounted to $4,000. One of the employees, Bad Wiser, damaged some parts whileinstalling the machine. It cost $500 to repair the damage. The machine has a projected useful life or 10years. The estimated salvage for the machine is $5,000.REQUIRED:1. Compute the initial cost of the machine on January 1, 20X6:100000 +1,000 +6%6000110,0002. Compute the yearly depreciation expense under the straight-line method:110,0005,00010,500103. Show what this machine would look like on the Balance Sheet at the end of 20X9.4. Assume the machine is sold on December 31, 20X9 for $60,000. Compute the gain orloss on the sale. Show all work clearly!!!(110,000- 60,000)x.50,0005. Record the sale.

The question is related to Property Plant and Equipment. The Cost includes: (i) its purchase price,…

REVIEW PROBLEM: SALE OF PROPERTY. PLANT AND EQUIPMENT The 1. M. Stoned Company acquired a machine from the Mickey Lobe Corporation on January 1, 20A0. The purchase price of the machine was $100,000, which did not include the 6% sales tax. Installation and delivery charges amounted to $4,000. One of the employees, Bad Wiser, damaged some parts whne installing the machine. It cost $500 to repair the damage. The machine has a projected useful life of 10 years. The estimated salvage for the machine is $5,000. REQUIRED: 1. Compute the initial cost of the machine on January 1, 20X6: 100000 +1,000 +6% 6000 110,000 2. Compute the yearly depreciation expense under the straight-line method: 110,000 9,000 10,500 10 3. Show what this machine would look like on the Balance Sheet at the end of 20X9. 4. Assume the machine is sold on December 31, 20X9 for $60,000. Compute the gain or loss on the sale. Show all work clearly!!! (110,000 - 60,060) x 50,000 5. Record the sale.