Question

Equipment that cost $420,000 and on which $200,000 of accumulated depreciation has been recorded was disposed of for $180,000 cash. the entry to record this event would include a

Answer 1

The entry to record this event would include a  LOSS OF $40,000.
The equipment original cost = $420,000
Accumulated depreciation = $200,000
Selling price = $180,000
 Loss = 180,000 - [420,000 - 200,000] 
= 180,000 - 220 = - 40,000
Thus, a loss of $40,000 was experienced in the sale of the equipment.