5 pts D Question 7 XYZ Company purchased a new machine on Ja

5 pts D Question 7 XYZ Company purchased a new machine on January 1, 2823 for $149,880. The machine had a 7-year life and a $5,600 salvage value assigned to it. The machine is being depreciated using the sum-of-the-years -digits method. XYZ Company sold the machine on December 31, 2825 for $20,00e0. Calculate the amount of the loss on the sale of the machine recorded by XYZ Company-

Solution

Year Depreciation expenses 2023 ($149,800 - $5,600) x (7/28) $36,050.00 2024 ($149,800 - $5,600) x (6/28) $30,900.00 2025 ($149,800 - $5,600) x (5/28) $25,750.00 Accumulated depreciation at December 31, 2025 $92,700.00 Cost $149,800.00 Accumulated Dep. $92,700.00 Book Value $57,100.00 Selling Price $20,000.00 Loss $37,100.00