Jeter Company purchased a new machine on May 1, 2000 for $176,000. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $8,000. The company has recorded monthly depreciation using the straight-line method. On March 1, 2009, the machine was sold for $24,000. What should be the loss recognized from the sale of the machine?

Question

Quizplus · Accepted Answer

($176,000 - $8,000) ÷ (10 × 12) = $1,400 per month 
$24,000 - [$176,000 - ($1,400 × 106 mo.)] = -$3,600.

Jeter Company Purchased a New Machine on May 1, 2000