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Sale of equipment Equipment was acquired at the beginning of the year at a cost of $600,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 16 years and an estimated residual value of $60,000. A. What was the depreciation for the first year? B. Assuming the equipment was sold at the end of the second year for $480,000, determine the gain or loss on the sale of the equipment. C. Journalize the entry on Dec. 31 to record the sale.

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Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 9, Problem 9.6BE
Textbook Problem

Sale of equipment

Equipment was acquired at the beginning of the year at a cost of $600,000. The equipment was depreciated using the double-declining-balance method based on an estimated useful life of 16 years and an estimated residual value of $60,000.

  1. A. What was the depreciation for the first year?
  2. B. Assuming the equipment was sold at the end of the second year for $480,000, determine the gain or loss on the sale of the equipment.
  3. C. Journalize the entry on Dec. 31 to record the sale.

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Corporate Financial Accounting
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