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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Vorst depreciates Asset C by the straight-line method. On June 30, 2020, Vorst sold Asset C for $28,000 cash. How much gain (loss) should Vorst record in 2020 on the disposal of Asset C?

  1. a. $2,800
  2. b. ($2,800)
  3. c. ($5,600)
  4. d. ($8,400)

To determine

Identify the correct option for the given statement.

Explanation

Straight-line depreciation method: The depreciation method which assumes that the consumption of economic benefits of long-term asset could be distributed equally throughout the useful life of the asset is referred to as straight-line method.

Ascertain the gain or loss on the disposal of Asset C in 2020 under straight line method as follows:

Computation of cash received from disposal
ParticularsAmount
Cost of...

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