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New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery...

New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery ovens to Great Harvest Bakery for $700,000. The oven originally costs $910,000, had an estimated service life of 10 years, had an estimated residual value of $60,000, and were depreciated straight-line depreciation. Complete the requirements below for New Morning Bakery.

Required:

1. Calculate the balance in the Accumulated Depreciation account at the end of the second year.

2. Calculate the book value of the ovens at the end of the second year.

3. What is the gain or loss on the sale of the ovens at the end of the second year?

4. Record the sale of the ovens at the end of the second year.

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