Onkar Corporation bought a machine on June 1 2010 for

#2154
Onkar Corporation bought a machine on June 1, 2010, for $31,800, f.o.b. the place of
manufacture. Freight costs were $300, and $500 was spent to install it. The machine's useful
life was estimated at 10 years, with a residual value of $1,900.On June 1, 2011, a part that was
designed to reduce the machine’s operating costs was added to the machine for a cost of
$1,980. On June 1, 2014, the company bought a new machine with greater capacity for a cost
of $35,000, delivered. A trade-in value was received on the old machine equal to its fair value of
$19,000. The cost of removing the old machine from the plant was $75, and the cost of
installing the new machine was $1,300. It was estimated that the new machine would have a
useful life of 10 years, with a residual value of $4,000.InstructionsAssuming that depreciation is
calculated on the straight-line basis, determine the amount of any gain or loss on the disposal of
the first machine on June 1, 2014, and the amount of depreciation that should be provided
during the company's current fiscal year, which begins on June 1, 2014.View Solution:
Onkar Corporation bought a machine on June 1 2010 for

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