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E6-34. Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale :05) Palepu Company owns and operates a delivery van that originally cost $27,200. Palepu has recorded straight-line depreciation on the van for three years, calculated assuming a $2,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van. a. Compute the net book value of the...
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Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Lynch Company owns and operates a delivery van that originally cost $51,200. Lynch has recorded straight-line depreciation on the van for four years, calculated assuming a $5,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the fourth year, at which time Lynch disposes of this van. a. Compute the net book value of the van on...
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Which of the statements below is FALSE?
A) The current book value of an asset serves as the basis for
determining the gain or loss at disposal.
B) Book value is the original cost of the asset plus the
accumulated depreciation.
C) A gain on disposal is recognized when the selling price of
the asset is greater than the book value.
D) A loss on disposal is recognized when the selling price of
the asset is less than the book...
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Computing Depreciation, Asset Book Value, and Gain or Loss on Asset Sale Sloan Company uses its own executive charter plane that originally cost $800,000. It has recorded straight line depreciation on the plane for six full years, with a $80,000 expected salvage value at the end of its estimated 10 year useful life. Sloan disposes of the plane at the end of the sixth year a. At the disposal date, what is the (1) accumulated depreciation and (2) net book...
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Problem 7-71B (Algorithmic)
Depreciation Schedules
Dunn Corporation acquired a new depreciable asset for $142,000.
The asset has a 5-year expected life and a residual value of
zero.
Required:
1. Prepare a depreciation schedule for all 5
years of the asset's expected life using the straight-line
depreciation method. If an amount is zero, enter "0".
Dunn Corporation
Straight-Line Depreciation Method
Five Years
End of Year
Depreciation Expense
Accumulated Depreciation
Book Value
$
Year 1
$
$
Year 2
Year 3
Year...
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Peavey Enterprises purchased a depreciable asset for $32,000 on
April 1, Year 1. The asset will be depreciated using the
straight-line method over its four-year useful life. Assuming the
asset's salvage value is $4,000, what will be the amount of
accumulated depreciation on this asset on December 31, Year 3?
Multiple Choice
$19,250
$5,833
$5,833
$7,000
$23,333
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Thomas Enterprises purchased a depreciable asset on October 1. Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $15,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining balance method, the asset's book value on December 31, Year 3 will be: $18.360 O $21,600 $32,400 $90,000 $27.540 Lomax Enterprises purchased a depreciable asset for $22.500 on March 1, Year 1 The asset will be depreciated...
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The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the: a. market value of the asset. b. blue book value of the asset. c. book value of the asset. d. depreciated difference of the asset. 26.
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Hinrich Company traded machinery with original cost of $145,000
and accumulated depreciation of $25,000. It received in exchange
from Noach Company a machine with a fair value of $180,000 and cash
of $20,000. Hinrich expects its future cash flows not to change as
a result of this transaction. Noach’s machine has a book value of
$190,000. What amount of gain or loss should Hinrich recognize on
the exchange? a. $ -0- *b. $8,000 gain c. $20,000 loss d. $80,000
gain...
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The following information is available on a depreciable asset
owned by Mutual Savings Bank:
Purchase date
July 1, Year 1
Purchase price
$115,600
Salvage value
$11,200
Useful life
12 years
Depreciation method
straight-line
The asset's book value is $98,200 on July 1, Year 3. On that date,
management determines that the asset's salvage value should be
$6,200 rather than the original estimate of $11,200. Based on this
information, the amount of depreciation expense the
company should recognize during the last...
E6-34. Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale :05) Palepu Company owns and operates a delivery van that originally cost $27,200. Palepu has recorded straight-line depreciation on the van for three years, calculated assuming a $2,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van. a. Compute the net book value of the...
Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Lynch Company owns and operates a delivery van that originally cost $51,200. Lynch has recorded straight-line depreciation on the van for four years, calculated assuming a $5,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the fourth year, at which time Lynch disposes of this van. a. Compute the net book value of the van on...
Computing Depreciation, Asset Book Value, and Gain or Loss on Asset Sale Sloan Company uses its own executive charter plane that originally cost $800,000. It has recorded straight line depreciation on the plane for six full years, with a $80,000 expected salvage value at the end of its estimated 10 year useful life. Sloan disposes of the plane at the end of the sixth year a. At the disposal date, what is the (1) accumulated depreciation and (2) net book...
Thomas Enterprises purchased a depreciable asset on October 1. Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $15,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining balance method, the asset's book value on December 31, Year 3 will be: $18.360 O $21,600 $32,400 $90,000 $27.540 Lomax Enterprises purchased a depreciable asset for $22.500 on March 1, Year 1 The asset will be depreciated...
The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the: a. market value of the asset. b. blue book value of the asset. c. book value of the asset. d. depreciated difference of the asset. 26.