On May 1, 2013, Bentham Company sells office furniture for $60,000 cash. The office furniture originally...
On May 1, 2013, Bentham Company sells office furniture for $60,000 cash. The office furniture originally cost $150,000 when purchased on January 1, 2006. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $15,000. What gain should be recognized on the sale?
Homework Answers
Gain on sale = Cash received - Book value
Book value = 150,000 - Accumulated Depreciation
Accumulated Depreciation =
Depreciation upto 2013 + Depreciation in 2013
= [(150,000-15,000)/10 * 7 years] + [150,000-15000)/10* 4/12]
= 94,500 + 4500
= 99,000
Gain on sale = 60,000 - (150,000-99,000)
= 60,000 - 51,000
= 9,000
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On May 1, 2013, Bentham Company sells office furniture for
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