Question

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction? Group of answer choices

loss of $50,000
gain of $50,000
loss of $260,000
no gain or loss

Answer 1

no gain or loss

Step-by-step explanation:

The amount of gain on the transaction is the difference between the sales value and the carrying value of the batting cages

The carrying value of the batting cages as at when it was sold

Carrying value= original cost - accumulated depreciation

=310,000 - 260,000

= 50,000

Gain/loss= sales value - carrying value

= 50,000 -50,000

= $0