Problem:
Roberts Company purchased a machine in January 2003 for $200,000. When originally purchased, the machine had an estimated useful life of five years and an estimated residual value of $30,000. The company uses straight-line depreciation. It is now June 30, 2006, and the company has decided to dispose of the machine.
Calculate the book value of the machine as of June 30, 2006, calculate the gain or loss on the sale of the machine assuming Roberts sells it for $102,000, and calculate the gain or loss on the sale of the machine assuming Roberts sells it for $25,000.