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SP Ltd. has a December 31 year end. On April 2, 2016, SP purchased a piece of equipment at a

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SP Ltd. has a December 31 year end. On April 2, 2016, SP purchased a piece of equipment at a cost of $180,000. SP’s management estimated that this piece of equipment would have a useful life of five years and a residual value of $30,000. SP uses the straight-line method for depreciating its manufacturing equipment.

Required:

If SP was to sell the piece of equipment on June 30, 2018, for $100,000, what would be the amount of the gain or loss that would have to be recorded?

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Depreciation expense 180 000 30 000 5 years 30 000 per year or 12 2 500 per mon…View the full answer


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Understanding Financial Accounting

Understanding Financial Accounting

ISBN: 978-1118849385

1st Canadian Edition

Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald

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Question Posted: June 11, 2015 10:01:00
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