Question

On January 1, 2012, Coronado Industries purchased for $762000, equipment having a useful life of ten years and an estimated salvage value of $45000. Coronado has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 2020, the equipment was sold for $162500. As a result of this sale, Coronado should recognize a gain of

Answer 1

Answer:

$45,800

Explanation:

Given that: the cost of the equipment =  $762000

We can determine the accumulated depreciation as follows:

Accumulated depreciation= ((cost of equipment - salvage value )/useful lifetime )×Depreciation from 2012 to 2020

$\mathbf{Accumulated \ depreciation= \dfrac{762,000-45,000}{10}*9 years}$

$\mathbf{Accumulated \ depreciation= \dfrac{717,000}{10}*9 years}$

$\mathbf{Accumulated \ depreciation}=$ $ 645,300

The Book value of equipment as on December 31,2020 = cost of equipment - accumulated depreciation

= $762,000 - $645,300

= $ 116,700

Also; the sale value = $162500

The gain to be recognize = $162,500 - $ 116,700 = $45,800

Answer 2

Answer:

$45,800

Explanation:

Coronado Industries

Cost of Equipment $762,00

Accumulated Depreciation

( $762,000 - 45,000 ) /10*9 years

=$717,000/10×9 years

=71,700×9 years

=$645,300

Therefore Dec 31,2012 book value of equipment will be:

= $762,000 - $645,300

= $116,700

Equipment sold $162,500

The gain to be recognize will be

= $162,500 - $116,700

= $45,800

1 January ,2012 to 31 December,2020 will give us 9 years