Account for disposal of an asset. (LO 5)
Analyze each of the following independent scenarios.
a. A company van that cost $32,000 had an estimated useful life of 8 years and no salvage value. After 6 years of using straight-line depreciation, the company sold the van for $12,000.
b. A copy machine that cost $35,000 had an estimated useful life of 5 years and a salvage value of $5,000. After 2 years of using double-declining balance depreciation the company sold the copy machine for $10,000.
c. A company truck that cost $48,000 had an estimated useful life of 7 years and a salvage value of $6,000. After 5 years of using straight-line depreciation and driving the truck many miles on tough terrain, the company sold the completely worn-out truck for $850 for spare parts.
d. A state-of-the-art computer that cost $29,000 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 computer for $6,000.
Required
For each scenario, calculate the gain or loss, if any, that would result upon disposal.