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Galina-37 [17]
3 years ago
14

Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had a

ccumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment.
Business
1 answer:
Archy [21]3 years ago
3 0

Answer:

Loss= $5,000

Explanation:

Giving the following information:

Selling price= $50,000

Purchase price= $85,000

Accumulated depreciation= $30,000

<u>First, we need to calculate the book value:</u>

Book value= Purchase price - Accumulated depreciation

Book value=  85,000 - 30,000 = $55,000

<u>If the selling price is higher than the book value, the company gain from the sale.</u>

Gain/loss= selling price - book value

Gain/loss= 50,000 - 55,000

Loss= $5,000

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Explanation:

3/10, net 20 is a payment term used for goods sold on credit. This means a 3% discount is given on payment due by the customer if the payment is made within 10 days. Otherwise, full payment need to be made in 20 days.

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