Equipment that cost $90,000 and on which $50,000 of accumulated depreciation has been recorded was disposed of for $45,000 cash.The entry to record this event would include a
A)gain of $5,000.
B)loss of $5,000.
C)credit to the Equipment account for $15,000.
D)credit to Accumulated Depreciation for $15,000.

Question

Quizplus · Accepted Answer

The book value of the equipment is $40,000 ($90,000 cost - $50,000 accumulated depreciation). Selling it for $45,000 results in a gain of $5,000 ($45,000 - $40,000).

Equipment That Cost $90,000 and on Which $50,000 of Accumulated