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Domino Inc. uses straight-line depreciation with a half-year convention in its financial statements. On March 10, 2018, Domino acquired a computer system at a cost
Domino Inc. uses straight-line depreciation with a half-year convention in its financial statements. On March 10, 2018, Domino acquired a computer system at a cost of 98,800. Estimated useful life is six years, with residual value of 5,200.
- Complete the following schedule, showing depreciation expense Domino expects to recognize each year in the financial statements. Show your workings. (20 points)
Year
| Depreciation Recognized in Financial Statements |
2018 |
|
2019 |
|
2020 |
|
2021 |
|
2022 |
|
2023 |
|
2024 |
|
- Assume Domino sells the computer system on October 3, 2021, for 26,650. For financial statement purposes, compute the book value of the computer system at date of disposal and the gain or loss on disposal (Indicate gain or loss). Show your workings. (10 points)
- Book Value (date of sale) ________
c. Gain or loss on disposal ________
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