Question: Elite Cleaners bought a new machine on January 1 2010

Elite Cleaners bought a new machine on January 1, 2010, for $75,000. The company expects the machine to have a useful life of 10 years and a salvage value of $10,000. The company’s fiscal year ends on December 31.

1. Calculate the depreciation expense for the fiscal years 2010 and 2011 using each of the following methods:
a. Straight-line method
b. Double-declining balance method
2. Elite Cleaners sold the machine on January 1, 2012, for $59,000. What was the gain or loss on the sale using each of the depreciation methods? (Round your answers.) On which financial statement would the gain or loss appear?

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  • CreatedSeptember 01, 2014
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