Asked by Estefanie Estupinan on Jun 14, 2024
Verified
A company sold a machine that originally cost $100,000 for $60,000 cash. The accumulated depreciation on the machine was $40,000. The company should recognize a:
A) $0 gain or loss.
B) $20,000 gain.
C) $20,000 loss.
D) $40,000 loss.
E) $60,000 gain.
Sold
The term refers to when goods or services are exchanged for money, transferring ownership from the seller to the buyer.
- Familiarize oneself with the monetary impact of disposing of assets, including the acknowledgment of gains or losses.
Verified Answer
KT
kaila thompsonJun 20, 2024
Final Answer :
A
Explanation :
The book value of the machine is calculated as the original cost ($100,000) minus the accumulated depreciation ($40,000), which equals $60,000. Since the machine was sold for its book value ($60,000), there is no gain or loss.
Learning Objectives
- Familiarize oneself with the monetary impact of disposing of assets, including the acknowledgment of gains or losses.
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