Question

Granite Stone Creamery sold ice cream equipment for $16,000. Granite Stone originally purchased the equipment for $90,000, and depreciation through the date of sale totaled $71,000. What was the gain or loss on the sale of the equipment?

Answer 1

Answer:

The loss amount is "$3,000".

Explanation:

The given values are:

Sale amount,

= $16,000

Ice-cream equipment's cost,

= $90,000

Depreciation,

= $71,000

Now,

The book value will be:

= $Ice \cream \ equipment's \ cost-Depreciation$

On substituting the values, we get

= $90,000-71,000$

= $19,000$ ($)

The loss on the sale will be:

= $Book \ value -Sale \ amount$

= $19,000-16,000$

= $3,000$ ($)