Laney Inc. and Monroe Company each ordered a new computer on January 1, 2017. The cost of each computer was $3,500. The economic life expectancy of each computer is three years with a $500 expected salvage value. During the current year Laney and Monroe experienced identical operating events with the only difference being that Laney used the straight-line depreciation method, while Monroe used the double-declining-balance depreciation method. Both became disenchanted with their computers during the year due to the introduction of a new generation of computers, and on December 31, 2017, each sold the computer for $800.
Calculate Laney's depreciation expense and loss (gain) from the disposal of the computer.

Question

Quizplus · Accepted Answer

The Answer of Laney Inc. and Monroe Company each ordered a new computer on January 1, 2017. The cost of each computer was $3,500. The economic life expectancy of each computer is three years with a $500 expected salvage value. During the current year Laney and Monroe experienced identical operating events with the only difference being that Laney used the straight-line depreciation method, while Monroe used the double-declining-balance depreciation method. Both became disenchanted with their computers during the year due to the introduction of a new generation of computers, and on December 31, 2017, each sold the computer for $800.
Calculate Laney's depreciation expense and loss (gain) from the disposal of the computer.

Laney Inc and Monroe Company Each Ordered a New Computer on on January