Exercise $11-10($Algo$)$ Disposal of property, plant, and equipment $[$LO$11-2]$

Mercury Incorporated purchased equipment in $2022$ at a cost of $$169,000.$ The equipment was expected to produce

$300,000$ units over the next five years and have a residual value of $$49,000.$ The equipment was sold for $$103,800$ part

way through $2024.$ Actual production in each year was: $2022=42,000$ units; $2023=67,000$ units; $2024=34,000$ units.

Mercury uses units$-$of$-$production depreciation, and all depreciation has been recorded through the disposal date.

Required:

Calculate the gain or loss on the sale.

Prepare the journal entry to record the sale.

Assuming that the equipment was instead sold for $$114,800,$ calculate the gain or loss on the sale.

Prepare the journal entry to record the sale in requirement $3.$

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $3$

Required $4$