Use the following to answer questions 20 - 22

AL Construction is in the process of closing its operations. It sold its 4-year-old Caterpillar 279C Compact Track Loader for $125,000. The loader originally cost $250,000 and had an estimated useful life of 7 years and an estimated residual value of $40,000. The company uses straight-line depreciation for all equipment.

20. $___________Calculate the book value of the loader at the end of the 4th year.

21. $___________What was the gain or loss on the sale of the loader at the end of the 4th year; (if loss, put in front of your answer).

22. Record the sale of the loader at the end of the 4th year.

22. The proper entry to record the sale of the loader would include all the following:

Debit Cash $125,000

Debit Equipment $130,000

Debit Loss

Debit Accumulated Depreciation $120,000

Debit Gain

Credit Cash $125,000

Credit Equipment $130,000

Credit Equipment $250,000

Credit Accumulated Depreciation $120,000

Credit Gain

Credit Loss