Computing Depreciation, Asset Book Value, and Gain or Loss on Asset Sale FSET

Sloan Company uses its own executive charter plane that originally cost $2,040,000. It has recorded straight-line depreciation on the plane for 6 full years, with a $204,000 expected salvage value at the end of its estimated 10 year useful life. Sloan disposes of the plane at the end of Year 6.

a. Determine the following at the disposal date: Accumulated depreciation $Answer

Net book value $Answer

b. Using the financial statement effects template, show how the disposal of the plane affects the balance sheet and income statement, assuming that the sales price is: 1. Cash equal to the book value of the plane. 2. $510,000 cash. 3. $1,530,000 cash.

	Balance Sheet				Income Statement
	Cash		Noncash		Contra				Contributed		Earned								Net
Sale price options	Asset	+	Assets	-	Assets	=	Liabilities	+	Capital	+	Capital				Revenues	-	Expenses	=	Income
1	Answer		Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer
2	Answer		Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer
3	Answer		Answer		Answer		Answer		Answer		Answer				Answer		Answer		Answer