8. On December 31, 2010, Hamilton Inc. sold a used industrial crane for $600,000 cash. The original cost of the crane was $5,000,000 and its accumulated depreciation equaled $4,200,000 on December 31, 2010; they had been using the straight-line depreciation method. The estimated residual value was zero and its useful life was 25 years. What is the gain or loss on the equipment on December 31, 2010? A) $250,000 loss B) $400,000 gain C) $200,000 loss D) $200,000 gain

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Keith LeannonLv2

11 Jun 2018

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Louisville Farms, a breeder of racehorses, paid $432,000 cashfor a prize-winning stallion on January 1, 2003. The stallion isdepreciated on a straight-line basis, with depreciation for partialyears rounded to the nearest month. Estimated useful life was nineyears, with no residual value. After owning the animal for sixyears and five months, Louisville Farms sold the stallion on May31, 2009, for cash of $85,000. Depreciation had last been recordedon December 31, 2008. a Compute to the nearest full monthdepreciation for the fractional period from January 1, 2009 to May31 of 2009. $______________ b Compute the book value of thestallion at May 31, 2009, the date of sale. $______________ cCompute the gain or loss on the sale of the stallion.$______________ (gain/loss)

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Use the following information for the next 5 questions:

On January 1, 2008, KA Company purchased equipment for$105,000. The estimated useful life of the equipment is10 years, during which time it will be produce 100,000units. Estimated residual value is$5,000. KAâs fiscal year is January 1 to December31.

If KA Company uses the straight-line methodof depreciation, thenet book valueof the asset at the end of the secondyear willbe:

If KA Company uses the units methodof depreciation and produced30,000 units in the first year, the depreciation expensefor thefirstyear will be:

If KA Company uses the double-declining-balance methodofdepreciation, the balance in accumulated depreciationat the end ofthe second year will be:

4.If he company should recognizea:

a. $70,000 loss on the sale

b. $35,000 gain on the sale

c. $10,000 gain on the sale

d. $10,000 loss on the sale

e.None of the above.

Assume KA Company purchased the equipment on July 1, 2008. Whatis the net book valueof the equipment on December 31, 2010, afteradjusting entries, if KA Company uses the straight-line methodofdepreciation?

On June 30, 2015, ABC, Inc. sold equipment for $6,350 cash. The equipment was purchased on January 1, 2010 at a cost of $15,000. The equipment was depreciated using the straight-line method over an estimated ten-year life with zero salvage value. ABC last recorded depreciation on the equipment on December 31, 2014, its year-end.

What journal entries are required on ABCâs books in order to record this sale?