1.method of depreciation.

Question

Quizplus · Accepted Answer

Since we are not given the method of depreciation, we cannot accurately determine the correct answer. However, if we assume a straight-line method of depreciation, the calculation would be $120,000 (cost of equipment) - $10,000 (residual value) / 5 (expected useful life) = $22,000 annual depreciation. Since the equipment was sold after three years, the accumulated depreciation would be $22,000 x 3 = $66,000. Therefore, the book value at the time of sale would be $120,000 - $66,000 = $54,000. If we subtract the sale price of $32,334 from the book value, we get a loss of $21,666.

1.method of Depreciation