A company sold a machine that originally cost $100,000 for $60,000 cash. The accumulated depreciation on the machine was $40,000. The company should recognize a:
A) $0 gain or loss.
B) $20,000 gain.
C) $20,000 loss.
D) $40,000 loss.
E) $60,000 gain.

Question

Quizplus · Accepted Answer

The book value of the machine is calculated as the original cost ($100,000) minus the accumulated depreciation ($40,000), which equals $60,000. Since the machine was sold for its book value ($60,000), there is no gain or loss.

A Company Sold a Machine That Originally Cost $100,000 for $60,000