Question

Mary, Inc. uses straight-line depreciation for all of its depreciable assets. Mary sold a used piece of machinery on December 31, 2015, that it purchased on January 1, 2014, for $15,000.
The asset had a five-year life, zero residual value, and $3,000 accumulated depreciation as of December 31, 2014.

If the sales price of the used machine was $9,500, the resulting gain or loss upon the sale was which of the following amounts?
A. Loss of $500
B. Gain of $500
C. Loss of $3,000
D. Gain of $3,000
E. No gain or loss upon the sale

Answer 1

The answer would be 300