Asked by Miguel Avalos on May 16, 2024
Verified
Albert Corp. bought a machine for $10,000 thirteen years ago. It has been depreciated on a straight line basis over a 20 year life with no salvage value. The firm just sold the machine for $6,000. How much gain/loss should be reported on the sale?
A) $4,000 loss
B) $2,500 loss
C) No gain or loss should be recorded.
D) $2,500 gain
E) $4,000 gain
Gain/Loss
The financial result that occurs when the selling price of an asset is higher or lower than its purchase price.
Straight Line Basis
A method of calculating depreciation and amortization that allocates an equal portion of an asset's cost to each period in its useful life.
Salvage Value
The estimated value that an asset will realize upon its sale at the end of its useful life.
- Implement depreciation calculations and comprehend their effect on financial statements.
Verified Answer
Learning Objectives
- Implement depreciation calculations and comprehend their effect on financial statements.
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