1) Compute the gain on transfer of equipment reported by Wilson for 2012.
Homework Answers
ANSWER:
Book value as on January 1, 2012 = $50,000
Remaining useful life of equipment = 10 years
Annual depreciation = $50,000 / 10,000
= $5,000
Depreciation from January 1, 2012 to March 31, 2012 = $5,000 * 3 months / 12 months
= $1,250
Book value of equipment as on April 1, 2012 = $50,000 - $1,250
= $48,750
Sales value of equipment = $68,250
Gain on transfer of equipment = $68,250 - $48,750
= $19,500
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