Q1. ABC Company sold an equipment for $1,000 cash on Feb 1, 2017. The equipment was originally purchased for $4,000, and, as of Feb 1, 2017, the accumulated depreciation using double-declining balance method was $1,500.
- How much is the carrying value of this equipment?
- Why does a company prefer to choose DDB method over the other methods?
- Any gain or loss on sale of this one?
- Show the entry on date of sale. You should zero out the balances of the Equipment and the Accumulated Depreciation.
Q2. If ABC purchased a bldg for an investment and not intended use, where in balance sheet should it be reported? Would it be depreciated?