Question

4. Inthis exact same scenario (end of 2014), assume Holey Foods hasequipment used exclusively for makingits non-organic, non-local food. The equipment was bought for $7Million on Jan 1, 2013 and uses Straight-Line depreciation. Theequipment has an initial residual value of $2 Million and anexpected useful life of five years. Another company, Groupoff, iswilling and able to pay Holey Foods $1 Million for the equipmentand there are no other potential buyers. The estimated future cashflows the equipment would help generate from use (not sale) are$20,000. Prior to any sale, what transaction should Holey Foodsrecord? If no entry is needed, clearly write No Entry Needed. 2points.