Account for disposal of an asset. (LO 5)
Analyze each of the following independent scenarios.
a. A truck that cost $25,000 had an estimated useful life of 5 years and no salvage value. After 4 years of using straight-line depreciation, the company sold the truck for $6.000.
b. A machine that cost $50,000 had an estimated useful life of 12 years and a salvage value of $2,000. After 10 years of using straight-line depreciation, the company sold the completely worn-out machine for $400 as scrap.
c. An asset that cost $40,000 had an estimated useful life of 4 years and a salvage value of $2,000. After 3 years of using double-declining balance depreciation, the company sold the asset for $11,000.
d. A machine that cost $15,000 had an estimated useful life of 5 years and no salvage value. After 4 years of using straight-line depreciation, the company deemed the asset worthless and hauled it to the dump.
Required
For each scenario, calculate the gain or loss, if any, that would result upon disposal.