Determine the gain or loss on the sale of equipment

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Sale of equipment

Equipment was acquired at the beginning of the year at a cost of $1,000,000. The equipment was depreciated using the double declining balance method based on an useful life of 5 years and an estimated residual value of $100,000.

1. What was the depreciation for the first year?

2. What was the book value for the second year?

3. Assuming the equipment was sold at the end of the third year for $500,000, determine the gain or loss on the sale of the equipment.

4. Journalize the entry to record the sale.

Reference no: EM133371586

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