On January 1, 2014, Hanson Manufacturing Company purchased equipment for $95,000. Hanson paid $2,000 to have the machine installed. The equipment is expected to have a 5 year useful life and a salvage value of $7,000.
Required:
a) Compute depreciation expense for 2014 and 2015 using straight line depreciation.
b) What is the book value at the beginning of 2016?
c) Assume the equipment was sold on January 1, 2016, for $65,000. Compute the amount of gain or loss from the sale.

Question

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The Answer of On January 1, 2014, Hanson Manufacturing Company purchased equipment for $95,000. Hanson paid $2,000 to have the machine installed. The equipment is expected to have a 5 year useful life and a salvage value of $7,000.
Required:
a) Compute depreciation expense for 2014 and 2015 using straight line depreciation.
b) What is the book value at the beginning of 2016?
c) Assume the equipment was sold on January 1, 2016, for $65,000. Compute the amount of gain or loss from the sale.

On January 1, 2014, Hanson Manufacturing Company Purchased Equipment for $95,000