Question

On December 31, 2016, Hamilton Inc. sold a used industrial crane for $1,060,000 cash. The original cost of the crane was $5.30 million and its accumulated depreciation equaled $4.35 million on December 31, 2016. What is the gain or loss from the December 31, 2016 equipment sale? a) $110,000 gain b) $950,000 gain c) $950,000 loss d) $110,000 loss

Answer 1

Answer: a) $110,000 gain

Step-by-step explanation:

Book value as on date of sale=Cost - Accumulated Depreciation

=$5,300,000 - $4,350,000

=$950,000

Gain on sales =1,060,000-950,000

=$110,000.

A gain because sales proceeds was greater than the Book value;

On December 31, 2016, Hamilton Inc recorded a gain of $110,000 gain