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

Mercury Incorporated purchased equipment in $2022$ at a cost of $$138,000.$ The equipment was expected to produce $500,000$ units over the next five years and have a residual value of $$38,000.$ The equipment was sold for $$78,200$ part way through $2024.$ Actual production in each year was: $2022=70,000$ units; $2023=112,000$ units; $2024=57,000$ 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 $$105,200,$ 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 $3$

Calculate the gain or loss on the sale.

Note: Do not round intermediate calculations