Question

equipment, december 31, 2022 $78,000 equipment, december 31, 2023 $86,000 accumulated depreciation, december 31, 2022 $47,000 accumulated depreciation, december 31, 2023 $36,000 during 2023, the company sold equipment for $10,000, which had a cost of $36,000 and accumulated depreciation of $30,000. how much of a gain or loss would be recognized on the sale of equipment? select one: a. gain of $4,000 b. gain of $6,000 c. gain of $11,000 d. loss of $6,000 e. loss of $4,000

Answer 1

The gain or loss on the sale of equipment can be calculated by subtracting the book value from the selling price. Therefore, the correct option is a. gain of $4,000.

Step-by-step explanation:

To determine the gain or loss on the sale of equipment, we need to calculate the book value of the equipment sold. The book value is the cost of the equipment minus the accumulated depreciation. In this case, the cost of the equipment sold is $36,000 and the accumulated depreciation is $30,000, so the book value is $6,000.

The company sold the equipment for $10,000, so we can calculate the gain or loss by subtracting the book value from the selling price. The gain or loss on the sale of equipment is therefore $10,000 - $6,000 = $4,000. Therefore, the correct answer is a. gain of $4,000.