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Equipment acquired on January 3, 2007, at a cost of $504,000, has an estimated useful life of 12 years, has an estimated residual value of $42,000, and is depreciated by the straight-line method.
a. What was the book value of the equipment at December 31, 2010, the end of the year?
b. Assuming that the equipment was sold on April 1, 2010, for $315,000, illustrate the effects on the accounts and financial statements of (1) depreciation for the three months until the sale date, and (2) the sale of the equipment.
What are the differences in reporting guidance in a for-profit and not-for-profit organization? What are the similarities in reporting guidance in a for-profit and not-for-profit organization?
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