Question
Horseshoe Company has a machine that originally cost $90,000. Depreciation has been recorded for three years using the straight-line method, with a $10,000 estimated salvage
Horseshoe Company has a machine that originally cost $90,000. Depreciation has been recorded for three years using the straight-line method, with a $10,000 estimated salvage value at the end of an expected ten-year useful life. After recording depreciation at the end of the third year, Horseshoe disposes of the machine.
For each of the following independent disposals of the machine, place the dollar amount of the recognized gain or loss in the appropriate column. If there is no recognized gain or loss, place a zero in each column.
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a. | Sold machine for $56,000 cash. |
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b. | Sold machine for $70,000 cash. |
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