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Smith & William Corporation sold used equipment on December 31, 2019 for $500,000 cash. The...

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Accounting

Smith & William Corporation sold used equipment on December 31, 2019 for $500,000 cash. The equipment was purchased on January 1, 2016 at a cost of $600,000. It has been depreciated using the straight line method over an estimated useful life of 8 years with an estimated residual value of $40,000.

Provide:

a. The assets net book value at the time of the sale

b. The capital gain or loss (specify which)

c. Would a capital gain or loss be categorized as operating or non-operating on the income statement?

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