On January 1st 2016 the Grumpy Company purchased a tractor for $120,000. This tr
ID: 2401939 • Letter: O
Question
On January 1st 2016 the Grumpy Company purchased a tractor for $120,000. This tractor is expected to last 12 years and have a $2400 salvage value Grumpy expects to drive the tractor 470400 miles . In 2016 Grumpy drove the tractor 80,000 miles; in 2017 Grumpy drove the tractor 127,000 miles Part 1: fill in the following table 2016 2017 2016 2017 dep exp dep exp book value book value straight line depreciation double declining depreciation units of activity depreciation Part 2: On January 1st 2018 Grumpy sold the tractor for $62,000. If Grumpy was using double declining balance depreciation, what gain or loss do they show on the sale? On January 1st 2016 the Grumpy Company purchased a tractor for $120,000. This tractor is expected to last 12 years and have a $2400 salvage value Grumpy expects to drive the tractor 470400 miles . In 2016 Grumpy drove the tractor 80,000 miles; in 2017 Grumpy drove the tractor 127,000 miles Part 1: fill in the following table 2016 2017 2016 2017 dep exp dep exp book value book value straight line depreciation double declining depreciation units of activity depreciation Part 2: On January 1st 2018 Grumpy sold the tractor for $62,000. If Grumpy was using double declining balance depreciation, what gain or loss do they show on the sale?Explanation / Answer
If Grumpy was using double declining balance depreciation, what gain or loss do they show on the sale?
Loss =62000-69444.44=-7444.44
Cost 120000 Less Salvage 2400 Depreciable Value 117600