Reference no: EM133189051
Question - On June 1, 2020, a company classified one of its equipment as held for sale, On this date, the equipment has a fair value less cost to sell of 4.5 million. This equipment was acquired on May 1, 2018 for 6 million and is depreciated over its ten-year useful life using the straight-line method.
On December 31, 2020, the equipment held for sale has a fair value less cost to sell of 4.3 million.
On December 31, 2021, the equipment held for sale is still unsold but it still qualifies for recognition as held for sale. On this date, its fair value less cost to sell is 4.6 million. For the year 2021, the company recorded Sales of 10 million and operating expenses of 7 million.
On May 31, 2022, the equipment held for sale was sold for 4.15 million.
Required -
1. Net income to be recognized in 2021 shall be?
2. Determine the gain/loss on disposal of the equipment in 2022.
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