New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery ovens to Great Harvest Bakery for $660,000. The ovens originally cost $866,000, had an estimated service life of 10 years, had an estimated residual value of $56,000, and were depreciated using straight-line depreciation. Complete the requirements below for New Morning Bakery.

Required:

1. Calculate the balance in the accumulated depreciation account at the end of the second year.

2. Calculate the book value of the ovens at the end of the second year.

3. What is the gain or loss on the sale of the ovens at the end of the second year?

4. Determine the financial statement effects of the sale of the ovens at the end of the second year. Note: Amounts to be deducted should be indicated by a minus sign