Answer:
They had a gain of $3,333.33
Explanation:
The expression for the accumulated depreciation is as follows;
depreciable cost=Acquisition cost-salvage value
where;
acquisition cost=$60,000
residual value=$12,000
replacing;
depreciable cost=60,000-12,000=$48,000
depreciable cost=$48,000
The annual depreciation can be expressed as;
annual depreciation=depreciable cost/estimated life
where;
depreciable cost=$48,000
estimated life=6 years
replacing;
annual depreciation=48,000/6=8,000
annual depreciation=$8,000
depreciation between January 1 and March 1=(2/12)×8,000=$1,333.33
depreciation by March 1=1,333.33+32,000=$33,333.33
Profit/loss=sale-book value by March 1
book value by March 1=60,000-33,333.33=$26,666.67
Profit/loss=30,000-26,666.67=$3,333.33
They had a gain of $3,333.33
