Final answer:
When Muller Company's income statement reports a gain from the sale of equipment, it means that the company made a profit from selling its equipment.
Step-by-step explanation:
When Muller Company's income statement reports a gain from the sale of equipment, it means that the company made a profit from selling its equipment. The gain represents the difference between the sale price of the equipment and its book value. Book value is the cost of the equipment minus its accumulated depreciation.
For example, if Muller Company sold a piece of equipment for $10,000 and its book value was $6,000, then the gain from the sale would be $4,000.