Question

Sold clothing manufacturing equipment for $31,000. originally purchased the equipment for $95,000, and depreciation through the date of sale totaled $78,500. What was the gain or loss on the sale of the equipment?

Answer 1

Gain= $14,500

Step-by-step explanation:

First, we need to calculate the book value of the equipment:

Book value= purchase price - accumulated depreciation

Book value= 95,000 - 78,500

Book value= $16,500

If the selling price is higher than the book value, the company made a profit by selling the equipment.

Gain/loss= selling price - book value

Gain/loss= 31,000 - 16,500

Gain= $14,500