Use the following information to answer bellow Questions
A county acquires equipment for $16,000,000 at the beginning of 2015. The equipment has an 8-year life, no residual value. At the beginning of 2021 (6 years later), the equipment is sold for $9,000,000. Use straight-line depreciation, if appropriate.
-The equipment is used for a parking garage and is reported in an enterprise fund. What is reported in the enterprise fund's operating statement, related to this equipment, in 2021?

Question

Use the following information to answer bellow Questions 
A county acquires equipment for $16,000,000 at the beginning of 2015. The equipment has an 8-year life, no residual value. At the beginning of 2021 (6 years later), the equipment is sold for $9,000,000. Use straight-line depreciation, if appropriate.
-The equipment is used for a parking garage and is reported in an enterprise fund. What is reported in the enterprise fund's operating statement, related to this equipment, in 2021?

Quizplus · Accepted Answer

Using full accrual accounting, the book value of the equipment is $16,000,000 - [($16,000,000/8) x 6] = $4,000,000. Gain on sale = $9,000,000 - $4,000,000 = $5,000,000.

Use the Following Information to Answer Bellow Questions