3. Barney Corp. owned an asset that cost $500,000. The company sold the asset on January 1, Year 3 for $340,000. Accumulated depreciation on the day of the sale was $260,000. Based on this information, answer the following questions: a. What is the gain/loss on the sale? Assets b. Show the impact of the transaction on the horizontal equation: Liabilities + Stockholders Rev/Gain Exp/Loss Equity Net Income Cash Flow 4. Giant Corp. purchased a truck on January 1, Year 1 for $75,000. The truck is estimated to have a 5. year life and salvage value of $15,000. The company uses the straight line method. a) At the beginning of Year 3, Giant revises the expected life to 7 years, what is the new annual depreciation expense? b) At the beginning of Year 3, Giant keeps the life the same, but changes the salvage value to $10,000. What is the new annual depreciation expense? 5. Vero Company purchased a coal mine on January 1, Year 1 for $15,000,000. 540,000 tons of coal are expected to be extracted from the mine. In Year 1, 70,000 tons are mined. What is the depletion expense for Year 17 6. The Jameson Company acquired the King Company for $3,500,000 cash. The fair value of Village's assets were $3,100,000 and the company had liabilities of $200,000. How much goodwill is recorded with the acquisition? Study guide - Chapter 6 (with solutions).docx