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  3. a company has the following fixed asset data:cost:

A company has the following fixed asset data:Cost: $500,000Accumulated depreciation: $200,000Book value: $300,000Useful life: 10...

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Accounting

A company has the following fixed asset data:

  • Cost: $500,000
  • Accumulated depreciation: $200,000
  • Book value: $300,000
  • Useful life: 10 years
  • Residual value: $50,000
Requirements:

(a) Calculate the annual depreciation expense using the straight-line method. (b) Determine the book value at the end of year 5. (c) Prepare the journal entries for the disposal of the asset at the end of year 5 for $250,000. (d) Discuss the impact of the disposal on financial statements.

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