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Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Zimmer Company owns...

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Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale Zimmer Company owns an executive plane that originally cost $2,560,000. It has recorded straight-line depreciation on the plane for seven full years, calculated assuming a $320,000 expected salvage value at the end of its estimated 10-year useful life. Zimmer disposes of the plane at the end of the seventh year. a. At the disposal date, what is the (1) cumulative depreciation expense and (2) net book value of the plane? (1) Cumulative depreciation expense $ (2) Net book value $ b. How much gain or loss is reported at disposal if the sales price is: Note: Do not use a negative sign with your answers. 1. Sales Price Gain or Loss A cash amount equal to the plane's net book value. $ $570,000 $ $1,400,000 $ 2. 3

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