An asset is purchased on Jenuary 1for 44200 iti expected to

An asset is purchased on Jenuary 1for $44200 iti expected to have a usefu life of four years after w will heve ompany us $31800 exactly two years after it is purchased, the company will record a years after which it an expected residual velue of $5,900. The c es the straight-ine method. If it is sold for O gain of $6750 O loss of $6750. O loss of $5.6540. O gain of $5,650 0 Type here to search De

Solution

Answer is Gain of $ 6750 Explanation: Cost of assets 44200 less: Salvage 5900 Depreciable amount 38300 Divide: Life 4 Annual depreciation 9575 Depreciation for two yrs 19150 Book value of assets 25050 Less: Sales value 31800 Gain on sale of asset 6750