Equipment that cost $144,000 and on which $120,000 of accumulated depreciation has been recorded was disposed of for $36,000 cash.The entry to record this event would include a
A)gain of $12,000.
B)loss of $12,000.
C)credit to the Equipment account for $36,000.
D)credit to Accumulated Depreciation for $120,000.

Question

Quizplus · Accepted Answer

The book value of the equipment is $24,000 ($144,000 cost - $120,000 accumulated depreciation). Selling it for $36,000 results in a gain of $12,000 ($36,000 - $24,000).

Equipment That Cost $144,000 and on Which $120,000 of Accumulated