Question: Lufthansa s policy of rolling over entire fleets of aircraft in

Lufthansa’s policy of rolling over entire fleets of aircraft in roughly 10 years—before the aircrafts have outlived their usefulness—began when seven first-generation 747s were sold. The 747s were bought 6 to 9 years earlier for $22–$28 million each and sold for about the same price.
1. Assume an average original cost of $25 million per aircraft, an average original expected useful life of 10 years, and a $3.5 million expected residual value for each aircraft. Also assume the planes were on average 8 years old at the time of disposal. Use straight-line depreciation. Compute the total gain or loss on the sale of the seven planes. Assume each plane sold for $25 million.
2. Prepare a summary journal entry for the sale.



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  • CreatedFebruary 20, 2015
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