Lawson Company purchased equipment, on 1/10/2012. The cost was $90,000, with 10 years useful life, and $ 5,000 salvage value. On 1/1/2018, the company exchanged its old equipment for new equipment. Lawson paid $36,000 cash in the trade. The old equipment that was traded had a fair value of $48,000. The transaction has commercial substance, and the company uses SLM method for depreciation. Required: Calculate the gain the company recorded on this transaction?
Lawson Company purchased equipment, on 1/10/2012. The cost was $90,000, with 10 years useful life, and $ 5,000 salvage value. On 1/1/2018, the company exchanged its old equipment for new equipment. Lawson paid $36,000 cash in the trade. The old equipment that was traded had a fair value of $48,000. The transaction has commercial substance, and the company uses SLM method for depreciation. Required: Calculate the gain the company recorded on this transaction?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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Lawson Company purchased equipment, on 1/10/2012. The cost was $90,000, with 10 years useful life, and $ 5,000 salvage value. On 1/1/2018, the company exchanged its old equipment for new equipment. Lawson paid $36,000 cash in the trade. The old equipment that was traded had a fair value of $48,000. The transaction has commercial substance, and the company uses SLM method for depreciation.
Required: Calculate the gain the company recorded on this transaction?
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