Depreciation; Gains and Losses in Financial Statements
in 2010, Amalfi

question 90

Essay

Depreciation; gains and losses in financial statements
In 2010, Amalfi, Inc. purchased equipment with an estimated 10-year life for $42,600. The residual value was estimated at $9,900. Amalfi uses straight-line depreciation and applies the half-year convention.
On 18 April 2012 Amalfi closed one of its plants and sold this equipment for $33,600. Under these assumptions compute the following for this equipment: $$\begin{array} { | l | l | } \hline \text { (a) Depreciation expense in 2010 } & \$\underline{\quad\quad} \\\hline \text { (b) Depreciation expense in } 2011 & \$\underline{\quad\quad} \\\hline \text { (c) Depreciation expense in 2012 } &\$\underline{\quad\quad} \\\hline \text { (d) Book value at the date of sale in 2012 } & \$\underline{\quad\quad} \\\hline \text { (e) Gain or loss on the sale in 2012 } & \\\hline \text { (underline the correct term) } & \$\underline{\quad\quad} \\\hline\end{array}$$

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Definitions:

Complaint Letter

A formal way of communicating dissatisfaction or a problem to an individual or organization, seeking resolution or redress.

Correspondence

The act of communicating by exchanging letters or emails, often used for professional, official, or formal personal reasons.

Goodwill

An intangible asset arising from the reputation, brand, or relationships a company has built, often reflected in its ability to generate future profits.

Memo

A written message, particularly in a business context, used for internal communication among employees or departments.