Anderson, Inc., has several pieces of highly specialized equipment. Management has determined that one piece of high-tech

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Anderson, Inc., has several pieces of highly specialized equipment. Management has determined that one piece of high-tech equipment needs to be replaced, even though it is still in good working condition. Advances in technology have rendered that piece of equipment obsolete when compared with newly developed equipment that is more efficient. Facts related to this piece of equipment are as follows:
. Original cost of the equipment was $300,000.
. Estimates at the time the equipment was originally purchased had a useful life of eight years with a residual value of $75,000.
. Double-declining-balance depreciation (twice the straight-line rate) has been recorded for two years up to the time management replaces the equipment.
. The equipment was sold for $125,000 to a company that does not require the latest technology.
a. Determine the book value of the equipment prior to the sale.
b. Did the sale result in a gain or loss, and, if so, how much?
c. If the equipment had been sold for $175,000 instead of $125,000, how would this change your answer in the previous requirement?

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