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In 2002, Deka, Inc. purchased equipment with an estimated 10-year life for $60,000. The residual value was estimated at $15,000. Deka uses straight-line depreciation and
In 2002, Deka, Inc. purchased equipment with an estimated 10-year life for $60,000. The residual value was estimated at $15,000. Deka uses straight-line depreciation and applies the half-year convention.
On April 18, 2004, Deka closed one of its plants and sold this equipment for $50,000.
Requirement:
Under these assumptions compute the following for this equipment:
1-Book Value at the date of sale in 2004 (Hint compute the Accumulated depreciation)
2- Gain or loss on the sale in 2004
3-Prepare the general journal to record the disposal of asset in 2004.
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