Lundstrom Ltd. (LL) has a December 31 year end. The company purchased a piece of equipment on
Question:
Lundstrom Ltd. (LL) has a December 31 year end. The company purchased a piece of equipment on June 22, 2020, at a cost of $448,000. LL’s management estimated that this piece of equipment would have a useful life of five years and a residual value of $28,000. LL uses the straight-line method for depreciating its manufacturing equipment.
Required
If LL sold the equipment on May 28, 2023, for $167,000, what amount of the gain or loss would have to be recorded? Prepare the journal entry to record the sale of the equipment.
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Depreciation expense 448000 28000 5 years 84000 per year or 12 7000 per month Carrying amoun...View the full answer
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Related Book For 
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
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