Equipment that cost $72,000 and on which $60,000 of accumulated depreciation has been recorded was disposed of for $18,000 cash. The entry to record this event would include a
A) gain of $6,000.
B) loss of $6,000.
C) credit to the Equipment account for $18,000.
D) credit to Accumulated Depreciation for $60,000.

Question

Quizplus · Accepted Answer

The book value of the equipment is $12,000 ($72,000 cost - $60,000 accumulated depreciation). Selling it for $18,000 results in a gain of $6,000 ($18,000 - $12,000).

Equipment That Cost $72,000 and on Which $60,000 of Accumulated