Un Company sold office equipment with a cost of $35,120 and accumulated depreciation of $30,783 for $6,540. Required a. What is the book value of the asset at the time of sale? b. What is the amount of gain or loss on the disposal? c. How would the sale affect net income (increase, decrease no effect) and by how much?
Un Company sold office equipment with a cost of $35,120 and accumulated depreciation of $30,783 for $6,540. Required a. What is the book value of the asset at the time of sale? b. What is the amount of gain or loss on the disposal? c. How would the sale affect net income (increase, decrease no effect) and by how much?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 20E: (Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company...
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Exercise 8-12A (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5
Un Company sold office equipment with a cost of $35,120 and accumulated depreciation of $30,783 for $6,540.
Required
a. What is the book value of the asset at the time of sale?
b. What is the amount of gain or loss on the disposal?
c. How would the sale affect net income (increase, decrease, no effect) and by how much?
d. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect) and by how much?
e. How would the event affect the statement of cash flows (increase, decrease, no effect) and in what section?
a. Book value
b. Gain (loss) on sale
c. Net income would
d. Total assets would
e. Effect on statement of cash flows
e. Section
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