Reference no: EM13913486
Question 1:
On June 1, 2004, XYZ Company paid $360,000 to purchase land, building, and equipment. The market value of these assets on that date were: land $90,000; building $260,000; equipment $50,000. Before the facilities could be used, XYZ Company had to spend $4,000 to put the equipment in working order and $15,000 to renovate the building. The equipment was then estimated to have a useful life of 10 years with a $7,000 salvage value. The equipment will be depreciated using the straight-line method.
On December 31, 2010, XYZ Company sold the equipment for $26,000 cash.
Calculate the gain recorded on the sale. Is the answer $4,650 gain??
Question 2:
On January 1, 2002, Top Flight Company purchased a machine for $68,000. The estimated life of the machine was 5 years, and the estimated salvage value was $5,000.
Assume the company employs the sum-of-the-years-digits' method of depreciation. Calculate the depreciation expense recorded on the machine in 2004.
Is the depreciation expense $50,400?
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