Answered step by step
Verified Expert Solution
Question
1 Approved Answer
5. Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Zimmer Company owns an executive plane that originally cost $ value
5. Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Zimmer Company owns an executive plane that originally cost $ value at the end of its estimate 51,200 It has recorded straight-line depreciation on it for 6-year useful life. Zimmer disposes of the plane at the end of the 4 th year. 4 full years, calculated assuming $ 5,000 expected salvage (a) At the disposal date, what is the (1) cumulative depreciation expense and (2) net book value of the plane? (a-1) Cumulative depreciation expense straight-line depreciation = (original cost - salvage value) / useful life = cummulative depreciation expense at the end of disposal date = $ $ 7,700 30,800 (a-2) Net book value (NBV) NBV = original cost - cummulative depreciation expense at disposal date = (b) How much gain or loss is reported at disposal if the sales price is: Note: Do not use a negative sign with your answers. $ 20,400 sales price gain or loss 1. a cash amount equal to the net book value $ 20,400 $ no gain or loss 2. $23,000 cash $ 23,000 $ 2,600 gain 3. $19,000 cash $ 19,000 $ 1,400 loss
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started