Answer:
gain of $6,350.
Explanation:
Depreciation expense each year = (cost of asset - residual value) / useful life
($46,200 - $6,300) / 4 = $9,975
Depreciation expense after two years = $9,975 x 2 = $19,950
Value of the equipment in two years = $46,200 - $19,950 = $26,250
If the equipment is sold for $32,600, the equipment would be sold at a profit
Profit = $32,600 - $26,250 = $6350
