On December 31,2019,Hamilton Inc.sold a used industrial crane for $600,000 cash.The original cost of the crane was $5.0 million and its accumulated depreciation equaled $4.2 million on December 31,2019.What is the gain or loss from the December 31,2019 equipment sale?

Question

Quizplus · Accepted Answer

To calculate the gain or loss from the sale, we need to subtract the accumulated depreciation from the original cost to get the book value of the crane. Book value = $5.0 million - $4.2 million = $0.8 million. Since the sale price of $600,000 is less than the book value, there is a loss of $0.2 million or $200,000. Therefore, the answer is C, $200,000 loss.