If the Dump Truck is sold for 120000 at the end of year 3 wh

If the Dump Truck is sold for $120,000 at the end of year 3, what is the gain/loss under each method?

Straight line depreciation, sum of the years, double declining, and modified accelerated cost recovery. Original cost is $125,000 with a useful life of 5 years. Residual value $15,000

1)-STRAIGHT LINE METHOD

DEPRICIATION FOR 3 YEARS-125000-15000=110000/5=22000*3=66000

GAIN=120000-66000=54000

3)-DOUBLE DECLINING METHOD-

YR1-120000*40/100=48000

YR2-120000-48000=72000*40/100=28800

YR3-72000-28800=43200*40/100=17280

TOTAL DEP=48000+28800+17280=94080

GAIN= 120000-94080=25920

If the Dump Truck is sold for $120,000 at the end of year 3, what is the gain/loss under each method? Straight line depreciation, sum of the years, double decli

If the Dump Truck is sold for 120000 at the end of year 3 wh

Solution

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