Question

Tulip Corporation purchased equipment for $ 54 comma 000on January​ 1, 2017. On December​ 31, 2019, the equipment was sold for $ 25 comma 000.Accumulated Depreciation as of December​ 31, 2019 was $ 28 comma 000.Calculate gain or loss on the sale.

Answer 1

Answer:

Gain/loss= $1,000 loss

Explanation:

Giving the following information:

Original price= $54,000

Accumulated depreciation= $28,000

Seling price= $25,000

The gain or loss from selling an asset depends on the book value.

Book value= original price - accumulated depreciation

Book value= 54,000 - 28,000= 26,000

If the selling price is higher than the book value, the company gain from the sale.

Gain/loss= 25,000 - 26,000= $1,000 loss