Computing Depreciation, Net Book Value, and Gain or Loss on Asset SaleZimmer Company owns an executive plane that originally cost $1,280,000. It has recorded straight-line depreciation on the plane for seven full years, calculated assuming an $160,000 expected salvage value at the end of its estimated 10-year useful life. Zimmer disposes of the plane at the end of the seventh year.

a. At the disposal date, what is the (1) cumulative depreciation expense and (2) net book value of the plane?

b. How much gain or loss is reported at disposal if the sales price is:

1. A cash amount equal to the planes net book value.

2. $285,000 cash.

3. $700,000 cash.