Question

4 years and a residual value of $51,000. Assume that On May 31, 2015, a company sold a storage shed. The company had purchased the shed on January 1, 2008 the company has been using the straight-line method and sold the asset for $257,000. $303,000. When purchased, it had been estimated to have a useful life of Calculate the gain or loss on disposal of the asset. on the disposal of the asset is $ The

Answer 1

Answer

--The GAIN on disposal of Assets is $ 87,500

--Working

A	Cost	$           303,000.00
B	Residual Value	$              51,000.00
C=A - B	Depreciable base	$           252,000.00
D	Life [in years]	14
E=C/D	Annual SLM depreciation	$              18,000.00
F	No. of years till 31 may 2015	7 years and 5 months
G = (18000 x 7) + (18000 x 5/12)	Accumulated Depreciation as on 31 May 2015	$           133,500.00
H = A - G	Book value at time of sale	$           169,500.00
I	Sold for	$ 257,000
J = I - H	Gain on Sale/Disposal	$              87,500.00 = Answer