Baxter Tile, Inc. purchased new trucks at the beginning of 2011 for $400,000. The trucks had an estimated life of 5 years and an estimated salvage value of $50,000. Baxter Tile uses straight-line depreciation. At the beginning of 2012, Baxter sold the trucks for $350,000 and purchased new trucks for $500,000. Determine the following amounts:
A) Book value of the trucks at the end of 2011.
B) Gain (loss) on the sale of the trucks at the begiming of 2012 (Indicate the amount and whether a gain or loss)

Question

Baxter Tile, Inc. purchased new trucks at the beginning of 2011 for $400,000. The trucks had an estimated life of 5 years and an estimated salvage value of $50,000. Baxter Tile uses straight-line depreciation. At the beginning of 2012, Baxter sold the trucks for $350,000 and purchased new trucks for $500,000. Determine the following amounts:
 A) Book value of the trucks at the end of 2011.
B) Gain (loss) on the sale of the trucks at the begiming of 2012 (Indicate the amount and whether a gain or loss)

Quizplus · Accepted Answer

The Answer of Baxter Tile, Inc. purchased new trucks at the beginning of 2011 for $400,000. The trucks had an estimated life of 5 years and an estimated salvage value of $50,000. Baxter Tile uses straight-line depreciation. At the beginning of 2012, Baxter sold the trucks for $350,000 and purchased new trucks for $500,000. Determine the following amounts:
 A) Book value of the trucks at the end of 2011.
B) Gain (loss) on the sale of the trucks at the begiming of 2012 (Indicate the amount and whether a gain or loss)