calculate depreciation under alternative methods and account for disposal of an asse 538675

Calculate depreciation under alternative methods and account for disposal of an asset.( LO 2,5)

Perfect Heating and Air purchased a truck 3 years ago for $50,000. The company expects the truck to have a useful life of 5 years with no salvage value. The company has taken three full years of depreciation expense.

Required

a. Assume that the company uses straight-line depreciation. If the truck is sold for $25,000, will there be a gain or loss on the sale? If so, how much? How will the sale affect the financial statements for the year?

b. Assume that the company uses double-declining balance depreciation. If the truck is sold for $15,000, will there be a gain or loss on the sale? If so, how much? How will the sale affect the financial statements for the year?

c. Assume the company uses straight-line depreciation and sells the truck for $20,000. Would there be a gain or loss on the sale? How would that change if the company had been using double-declining balance depreciation?