Final answer:
Using the straight-line method for depreciation, the machine's total accumulated depreciation is $35,400 by March 2017. With a book value of $3,600 and a sale price of $1,800, Thayer Corporation should recognize a loss of $1,800, which is not listed among the given options.
Step-by-step explanation:
Thayer Corporation has to calculate the depreciation of the machine it bought for $39,000 with a salvage value of $3,000 over a useful life of 10 years. The depreciation per year using the straight-line method would be calculated as (Cost - Salvage Value) / Useful Life, which is ($39,000 - $3,000) / 10 = $3,600 per year. Since the monthly depreciation is the annual depreciation divided by 12, this results in $3,600 / 12 = $300 per month. By March 1, 2017, Thayer Corporation has had the machine for 9 years and 10 months (or 118 months) and thus would have accrued a total depreciation of 118 months * $300 = $35,400.
The book value of the machine on March 1, 2017, is the original cost minus the accumulated depreciation, which is $39,000 - $35,400 = $3,600. The loss on the sale of the machine is the book value minus the sale price: $3,600 - $1,800 = $1,800. Therefore, none of the provided options (A. $4,800, B. $2,750, C. $5,400, D. $8,400) are correct, and Thayer Corporation should recognize a loss of $1,800 on the sale of the machine.