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6. On the first day of its fiscal year, Scooter Co. purchased a computer system for a total cost of $50,000. The computer sys
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Answer #1

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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