Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to...

Transcribed Image Text:

Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to produce 490,000 units over the next five years and have a residual value of $40,000. The equipment was sold for $199,100 part way through 2024. Actual production in each year was: 2022 = 70,000 units; 2023 = 111,000 units; 2024 = 56,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $235,100, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the gain or loss on the sale. Note: Do not round intermediate calculations. Gain on sale of equipment Required 2 > Mercury Incorporated purchased equipment in 2022 at a cost of $383,000. The equipment was expected to produce 490,000 units over the next five years and have a residual value of $40,000. The equipment was sold for $199,100 part way through 2024. Actual production in each year was: 2022 = 70,000 units; 2023 = 111,000 units; 2024 = 56,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $235,100, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the gain or loss on the sale. Note: Do not round intermediate calculations. Gain on sale of equipment Required 2 >

Answer rating: 100% (QA)

Answer To calculate the gain or loss on the sale of the equipment we n... View the full answer