Reference no: EM132488440

Question 1: Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $21,000 for the truck. The truck is expected to have a $2,500 residual value and a 6-year life. Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense? (Enter only whole dollar values.)

Question 2: Somerset Company acquired a piece of equipment with a list price of $200,000 for $190,000. Freight to Somerset's location was $4,000. Installation and testing costs were $10,500. An old piece of equipment was scrapped as a result of this new purchase. The old piece of equipment had a depreciated value (net book value) of $8,000. The new piece of equipment is expected to have a 10 year life and a salvage value of $15,000. What is the total value assigned to the new piece of equipment?

Question 3: Bowie Company uses a calendar year and the straight line depreciation method. On December 31, 2018, after adjusting entries were posted, Bowie Company sold a machine which was originally purchased on January 1, 2015. The historical cost was $24,500, the salvage value assumed was $1,000 and the original estimated life was five years.. It was sold for $4,800 cash. Using this information, how much should be recorded on December 31 for the Gain or (Loss)? Round to whole dollars.