SSG bought a machine for $40,000 in January year 1. The machine had an expected useful...

 

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SSG bought a machine for $40,000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight-line basis where a full year's charge in made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December. What is the total amount of profit/loss charged to the income statement over the life of the machine? SSG bought a machine for $40,000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight-line basis where a full year's charge in made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December. What is the total amount of profit/loss charged to the income statement over the life of the machine?

Answer rating: 100% (QA)

Answer Step 1 i Depreciation is an amortization expense of the assets cos... View the full answer