Question
The firm MovingCargo has a truck which was purchased for $80,000 and was depreciated $3,000 per year for the first five years. At the beginning
The firm MovingCargo has a truck which was purchased for $80,000 and was depreciated $3,000 per year for the first five years. At the beginning of year 6 the firm impairs the machine by $7,000 and shortly thereafter they sell the machine for $50,000 in cash.
- Whats the Gain or Loss on the sale?
Assume that the time between impairment and sale is short so no additional depreciation is taken in that period.
- What are the financial statement effects of the sale?
| Assets | = | Liabilities | + | Equity |
| Sales | - | Expenses | = | Profit | ||
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Management And Cost Accounting
Authors: Colin Drury
5th Edition
9781861525369
