Question

A company sells equipment for $4,000. the original cost was $50,000.the accumulated depreciation is $45,000. the sale results in what?A. a loss of $4000B. a loss of $1000

Answer 1

Loss of $1000

Step-by-step explanation

Cost is $50000

The less accumulated depreciation is $45000

Hence, the book value on data on sale;

`\begin{gathered} 50000-45000 \\ =5000 \end{gathered}`

Gain or loss on sale = Sale value - Book value;

`\begin{gathered} 4000-5000 \\ =-1000 \end{gathered}`

Therefore a loss