A Machine Was Purchased for $100,000 in 2011 and Used

question 139

Essay

A machine was purchased for $100,000 in 2011 and used for four years,during which $60,000 of depreciation accumulated.The machine was then sold for $60,000 cash.What is the gain or loss on this transaction? Assume depreciation is up to date at the time of the sale.

Understand the sum-of-the-years-digits method of depreciation.

Calculate annual depreciation expenses for various types of assets.

Calculate book value at the end of a given period using different depreciation methods.

Apply the concept of estimated scrap value in depreciation calculations.

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Definitions:

Consequential Damages

Financial losses that result indirectly from a breach of contract, beyond the immediate scope of the agreement.

Personal Injuries

Harm suffered by an individual to their body, mind, or emotions, as opposed to damage to property.

Contract Excludes

Specific provisions or clauses within a contract that explicitly nullify the inclusion of certain terms, rights, or obligations.

Repudiation

It refers to the rejection or denial of a duty or obligation in a contract, essentially indicating that one party will not honor their commitments.