Question

Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $30,000, the company should record: Multiple Choice A gain of $10,000. A loss of $10,000. A loss of $35,000. No gain or loss.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Equipment originally costing $65,000 has accumulated depreciation of $25,000. The equipment is sold for $30,000.

An asset provides gain or loss depending if the selling price is higher or lower the book value.

Book value= Purchasing price - accumulated depreciation

Book value= 65,000 - 25,000= $40,000

Gain or loss from selling the equipment= selling price - book value

Loss from selling the equipment= 30,000 - 40,000= -$10,000