In 2002, Deka, Inc. purchased equipment with an estimated 10-year life for $60,000. The residual value was estimated at $15,000. Deka uses straight-line depreciation and applies the half-year convention.

On April 18, 2004, Deka closed one of its plants and sold this equipment for $50,000

Requirement:

Under these assumptions compute the following for this equipment:

1-Book Value at the date of sale in 2004 (Hint compute the Accumulated depreciation)

2- Gain or loss on the sale in 2004

3-Prepare the general journal to record the disposal of asset in 2004.

Answer rating: 100% (QA)

Working notes Cost of Equipment Less Salvage value Depreciable cost 60000 15000 45000 a Estimated l... View the full answer