(Learning Objectives 2, 3: Analyzing the effect of a sale of a PPE; DDB depreciation)

Assume that on January 2, 20X6, Maxwell of Michigan purchased fi xtures for $8,800 cash, expecting the fi xtures to remain in service for fi ve years. Maxwell has depreciated the fi xtures on a double-declining-balance basis, with $1,300 estimated residual value. On August 31, 20X7, Maxwell sold the fi xtures for $2,900 cash. Record both the depreciation expense on the fi xtures for 20X7 and the sale of the fi xtures. Apart from your journal entry, also show how to compute the gain or loss on Maxwell’ disposal of these fi xtures.