On January 1, a company sold a machine for $5,000 that it had used for several years. The machine cost $11,000, and had accumulated depreciation of $4,500 at the time of sale. What gain or loss will be reported on the income statement for the sale of the machine for the year ended December 31?
A)gain of $5,000
B)loss of $6,500
C)loss of $1,500
D)gain of $1,500

Question

Quizplus · Accepted Answer

To calculate the gain or loss, we need to subtract accumulated depreciation from the cost of the machine: $11,000 - $4,500 = $6,500. Since the company sold the machine for $5,000, this results in a loss of $1,500 ($5,000 - $6,500 = -$1,500). Therefore, the answer is C, loss of $1,500.

On January 1, a Company Sold a Machine for $5,000