6) Double decline rate = 100/5*2 = 40%
Depreciation expense for first year = 50000*40% = 20000
So answer is d) $20000
7) Journal entry
Date | account and explanation | Debit | Credit |
Cash | XXX | ||
Accumulated depreciation | XXX | ||
Loss on sale of equipment | XXX | ||
Equipment | XXX |
So answer is b) Debit to loss on sale of asset
8) Book value of truck = 90000-25200 = 64800
Gain on sale of assets = 68700-64800 = 3900
So answer is a) A gain of $3900
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