The company bought a machine for $40, 000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight line basis where a full year's charge is made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $ 15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December. What is the total amount of profit/loss charged to the statement of profit or loss over the life of the machine?

The company bought a machine for $40, 000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight line basis where a full year's charge is made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $ 15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December. What is the total amount of profit/loss charged to the statement of profit or loss over the life of the machine?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...

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