Find what is the gain or loss on disposal

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Reference no: EM132771582

Initial Purchase

Price of Asset: $100,000

Salvage Value: $ 0

Useful Life: 5 years

Problem 1. What is the accumulated depreciation at the end of year 2, assuming straight line depreciation and if the salvage value was $10,000 at the time the asset was acquired?

A. 18,000

B. 22,000

C. 22,500

D. 36,000

E. 40,000

Problem 2. What is the gain/loss on disposal if the equipment is sold in one year for $90,000 (assume straight-line depreciation and salvage value of $10,000)

A. Gain of $8,000

B. Loss of $10,000

C. Gain of $12,000

D. Loss of $14,000

E. Gain of $16,000

Reference no: EM132771582

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