Company discarded a computer system originally purchased for $18,000.

Company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an):
Select one:
a. $800 loss.
b. $8,000 loss.
c. $0 gain or loss.
d. $800 gain.

Expert Solution

Answer: a - $800 loss

Explanation

Purchase Cost = $18000

Written down value of computer system = Cost - Accumulated Depreciation

= $18000 - $17200 = $800

Company discarded a computer system carrying a value of $800. ie $800 will be recognized as loss.

ekkarill92 answered 2 years ago

1. Trident Developers purchased a computer system for $100,000 on June 4, 2003. The computer system...

1. Trident Developers purchased a computer system for $100,000 on June 4, 2003. The computer system is used for business 100% of the time. The accountant for the company elected to take a $12,000 Section 179 deduction, and the asset qualified for a special depreciation allowance (see Table 17-4). Click here for Table 17-4 a. What was the basis for depreciation of the computer system? $ b. What was the amount of the first year's depreciation using MACRS? Click here...

The Computer company is evaluating the replacement of one of its machines. The machine was originally...

The Computer company is evaluating the replacement of one of its machines. The machine was originally purchased ten years ago at a cost of $35,000 and has been depreciated to a book value of zero. If Pioneer replaces the machine, it will be able to bid on larger projects that require the capabilities of the new machine. The new machine will cost the firm $80,000, which will be depreciated over 4 years according to the following depreciation rates: 40% in...

Larkspur Company purchased a computer system for $78,300 on January 1, 2019. It was depreciated based...

Larkspur Company purchased a computer system for $78,300 on January 1, 2019. It was depreciated based on a 8-year life and an $17,900 salvage value. On January 1, 2021, Larkspur revised these estimates to a total useful life of 4 years and a salvage value of $10,200. Larkspur uses straight-line depreciation. Prepare Larkspur’s entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...

Bramble Company purchased a computer system for $73,400 on January 1, 2019. It was depreciated based...

Bramble Company purchased a computer system for $73,400 on January 1, 2019. It was depreciated based on a 7-year life and an $19,500 salvage value. On January 1, 2021, Bramble revised these estimates to a total useful life of 4 years and a salvage value of $10,500. Bramble uses straight-line depreciation. Prepare Bramble’s entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...

Marigold Company purchased a computer system for $74,750 on January 1, 2019. It was depreciated based...

Marigold Company purchased a computer system for $74,750 on January 1, 2019. It was depreciated based on a 7-year life and an $17,700 salvage value. On January 1, 2021, Marigold revised these estimates to a total useful life of 4 years and a salvage value of $9,400. Marigold uses straight-line depreciation. Prepare Marigold’s entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No...

Oct. 1 Aster Turane invested $49,000 cash, a $18,000 computer system, and $17,000 of office equipment in...

Oct. 1 Aster Turane invested $49,000 cash, a $18,000 computer system, and $17,000 of office equipment in the business. 2 Paid six months of rent in advance; $9,000. 3 Purchased computer supplies on credit for $1,975 from Triple-One Supplies. 5 Paid $24,000 cash for one year's premium on a property and liability insurance policy. 6 Billed Norton Electric $11,300 for installing a new computer system. 8 Paid for the computer supplies purchased from Triple-One Supplies. 10 Hired Donald Gee as a...

On January 2, 2018, Baltimore Company purchased 18,000 shares of the stock of Towson Company at...

On January 2, 2018, Baltimore Company purchased 18,000 shares of the stock of Towson Company at $10 per share. Baltimore obtained significant influence as the purchase represents a 40% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $19,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $50,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $26...

20. Lussier Company purchased a new computer for $175,000. It is estimated that the computer will...

20. Lussier Company purchased a new computer for $175,000. It is estimated that the computer will have a $15,000 residual value at the end of its 5-year useful service life. The double diminishing-balance method of depreciation will be used. Instructions Prepare a depreciation schedule which shows the annual depreciation expense on the computer for its 5-year life.

A company is selling an equipment after four years for $48,887. The equipment was originally purchased...

A company is selling an equipment after four years for $48,887. The equipment was originally purchased for $110,475. The tax rate is 22%.The equipment is classified as a 5-year property. What is the after-tax salvage value?

2. A membrane-based separation system is purchased by a water purification company. They purchased a system...

2. A membrane-based separation system is purchased by a water purification company. They purchased a system with 10-year depreciable life for $1,000,000. Use DB method to calculate annual depreciation amounts when (a) 200% DB method (b) 150% DB method. Tabulate the annual depreciation amount and BV for each year.

Question