Homework SourseSheffield Corp purchased machinery for 1410000 on January 1
Sheffield Corp. purchased machinery for $1410000 on January 1, 2014. Straight-line depreciation has been recorded based on a $72000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2018 at a gain of $18500. How much cash did Sheffield receive from the sale of the machinery?
Solution
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Answer is $268,900
| Cost of Machinery | $ 1,410,000 |
| Less: Salvage value | $ (72,000) |
| Depreciable value | $ 1,338,000 |
| Life of Machinery | 5 Years |
| Depreciation per year ($1,338,000/5) | $ 267,600 |
