Answered

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On January 1, 2012, Sunland Company purchased for $690000, equipment having a useful life of ten years and an estimated salvage value of $40200. Sunland has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 2020, the equipment was sold for $160000. As a result of this sale, Sunland should recognize a gain of

Sagot :

Answer:

$54,820

Explanation:

The computation of the gain is shown below;

But before that following calculations must be done

Annual depreciation as per the straight-line method

= ($690,000 - $40,200) ÷ (10 years)

= $64,980

Now accumulated depreciation for 9 years is

= $64,980 × 9 years

= $584,820

Now the book value is

= $690,000 - $584,820

= $105,180

Now the gain is

= Sale value - book value

= $160,000 - $105,180

= $54,820

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