On January 1, 2010, Ringo purchased, for $100, 000, equipment having a useful life of eight years and an estimated salvage value of $4, 000.Ringo has recorded monthly depreciation on the equipment using the straight-line method.On March 1, 2015, the equipment was sold for $46, 000.As a result of this sale, Ringo should recognize

Question

Quizplus · Accepted Answer

The equipment's book value at the time of sale was $38,000, calculated as the original cost ($100,000) minus accumulated depreciation over 5 years and 2 months. The sale price was $46,000, resulting in an $8,000 gain.

On January 1, 2010, Ringo Purchased, for $100, 000, Equipment