On March 31, 2021, Top Notch Goods committed to a plan to sell machinery equipment. The...
On March 31, 2021, Top Notch Goods committed to a plan to sell machinery equipment. The machinery equipment was available for immediate sale, and an active plan to locate a buyer was initiated. The machinery equipment had been purchased on January 1, 2019, for $260,000. The machinery equipment had an estimated six-year service life and residual value of $20,000. The machinery equipment was being depreciated using the straight-line method. Top Notch Good's fiscal year ends on December 31.
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Calculate the equipment’s book value as of March 31, 2021
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By December 31, 2021, the machinery equipment has not been sold, but management expects that it will be sold in 2022 for $150,000. For what amount is the machinery equipment reported in the December 31, 2021, balance sheet?
Homework Answers
a) Equipment Book value = Cost-Accumulated depreciation = 260000-(240000/72*27) = 170000
b) Equipment book value = Cost -accumulated depreciation = 260000-(240000/6*3) = 140000
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