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pishuonlain [190]
3 years ago
10

Hank owns a gym called Ultimate Fitness. During the past year, Hank sold his facility to purchase a larger building with a parki

ng lot. He received sales proceeds of $125,000 from the buyer. He paid a sales commission to his broker of $6,500. The building had an original cost of $105,500 and had accumulated depreciation for tax purposes of $15,825. What is Hank's realized gain or loss on the sale? Gain of $118,5
Business
1 answer:
vladimir1956 [14]3 years ago
7 0

Answer:

$28,825 gain

Explanation:

For computing the gain or loss, first, we have to determine the  book value of an asset   which is shown below:

= Original value of the building - accumulated depreciation  

= $105,500 - $15,825

= $89,675

So, the gain would be

= Sale value - sales commission - book value

= $125,000 - $6,500 - $89,675

= $28,825 gain

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