Answer:
Loss on sale of machinery = $8,000
Explanation:
Under Straight line depreciation method, depreciation is calculated as follows:
Depreciation to be charged per annum over the life of asset is given by the formula: =
Depreciation = ($70,000 - $ 6,000) ÷ 8 years
Depreciation to be charged every year = $8,000
Now, total depreciation charged till the end of 6 years = 6 × $8,000 = $48,000
Book Value at the end of year 6 = $70,000 - $48,000= $22,000
Sale Value of the asset = $ 14,000
Loss on sale = $22,000 - $14,000 = $8,000