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10 December, 03:31

Ahrens Industries purchased a machine for $352,000. At that time, the machine had an estimated 10-year useful life and $16,000 salvage value. Ahrens has recorded monthly straight-line depreciation on the machine. Ahrens sold the machine on March 1, 2020 for $48,000. How much loss should Ahrens recognize on the sale?

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  1. 10 December, 03:59
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    There is no loss on disposal, instead a gain of $32,000

    Explanation:

    Depreciable Value = Cost of the asset - salvage value

    = $352,000-$16,000

    =$336,000

    Annual Depreciation = $336,000/10

    =$33,600

    Carrying Value as at March 1,2020 = $352,000 - ($33,600*10)

    =$16,000

    Gain on disposal = $48,000 - $16,000

    = $32,000
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Home » Business » Ahrens Industries purchased a machine for $352,000. At that time, the machine had an estimated 10-year useful life and $16,000 salvage value. Ahrens has recorded monthly straight-line depreciation on the machine.
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