On December 31, 2014, 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, 2014. What is the gain or loss from the December 31, 2014 equipment sale?

Question

Quizplus · Accepted Answer

To calculate the gain or loss, we need to subtract the equipment's book value from the sale price. The book value can be calculated by subtracting the accumulated depreciation from the original cost: $5.0 million - $4.2 million = $800,000.

Therefore, the gain or loss is $600,000 - $800,000 = -$200,000, which is a loss of $200,000. The answer is C, $200,000 loss.