Koch Company owns equipment that cost $100,000 when purchased on January 1, 2007. It has been depreciated using the straight-line method based on estimated salvage value of $10,000 and an estimated useful life of 5 years.

Instructions

Calculate the gain/loss for the sale of the equipment in these four independent situations.

(a)Sold for $56,000 on January 1, 2010.

(b)Sold for $56,000 on May 1, 2010.

(c)Sold for $22,000 on January 1, 2010.