Basics of straight-line depreciation

Reference no: EM13130167

On January 1, 2006, Demers Company, an 80% owned subsidiary of Collins, Inc., transferred equipment with a 10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of transfer, Demers records carried the equipment at a cost of $120,000 less accumulated depreciation of $48,000. Straight-line depreciation is used. Demers reported net income of $28,000 and $32,000 for 2006 and 2007, respectively. Compute the gain recognized by Demers Company relating to the equipment for 2006:

a) $36,000

b) $34,000

c) $12,000

d) $10,000

Reference no: EM13130167

Questions Cloud

Reproductive capabilities of vulnerable populations : Forced sterilization is possibly one of the greatest affronts to individual autonomy, as the permanent impairment of one’s ability to reproduce not only robs the individual of their natural ability to procreate, but denies them a future genetic ..

Compute the change in temperature : Compute the change in temperature when 1.8 g of sodium chloride is dissolved in 300.0 mL of water initially at 20C. The heat capacity of water is 4.184 J/mL/K.

Explain kind of data to assess pain using emoticons : When students go to the Health Center these days complaining of pain, they are asked to assess their pain using emoticons. One person's assessment is an example of what kind of data?

Determine the interest rate that applies relative to amount : Gordon paid the $10000 balance of his federal income tax three months late. Ignore daily compounding of interest. Determine the interest rate that applies relative to this amount.

Basics of straight-line depreciation : Straight-line depreciation is used. Demers reported net income of $28,000 and $32,000 for 2006 and 2007, respectively. Compute the gain recognized by Demers Company relating to the equipment for 2006:

Peaks would expect to find in the nmr spectrum of caffeine : How many peaks would you expect to find in the NMR spectrum of caffeine? What characteristic absorption bands would you expect to find in the infrared spectrum of caffeine?

What amount related to bonds would baddour report : What amount(s) related to the bonds would Baddour report in its income statement for the year ended September 30, 2011? What amount(s) related to the bonds would Baddour report in its statement of cash flows for the year ended September 30, 2011? I..

How much h2o is produced : How much H2O is produced when 20000 g of C2H2 burns completely? Answer in units of grams

Discuss the inherit risks related to sampling methods : Discuss the inherit risks related to sampling methods and how the risk of audit sampling can be minimized by the auditing team.

User Account

All Pages