Homework Answers
Answer
- Working
|
A |
Cost |
$ 528,000.00 |
|
B |
Residual Value |
$ 24,000.00 |
|
C=A - B |
Depreciable base |
$ 504,000.00 |
|
D |
Life [in years] |
10 |
|
E=C/D |
Annual SLM depreciation |
$ 50,400.00 |
>Per month depreciation = $ 50400 / 12 months = $ 4200
>No of months since 1 May 2009 to 1
Mar 2018
= 8 months of 2009 + 96 months from 2010 to 2017 + 2 months of
2018
= 8 + 96 + 2
= 106 months.
>Total Accumulated Depreciation at
time of sale = 106 months x $ 4200 depreciation per months
= $ 445,200
>Book Value at time of sale = $
528000 cost - $ 445200
= $ 82,800
- Loss on sale = Book Value at time of sale – Cash received on
sale
= $ 82800 – 72000
= $ 10,800 - Correct Answer = Option ‘B’ $ 10,800
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