Excalibur Company sells equipment for $20,000 cash.The gain or loss on the sale of equipment equals:

Question

Quizplus · Accepted Answer

The gain or loss on the sale of equipment is calculated as the difference between the cash received and the book value of the equipment. If the cash received is greater than the book value, there is a gain; if the cash received is less than the book value, there is a loss. The accumulated depreciation is used to determine the book value, but it is not included in the calculation of the gain or loss. Therefore, choice D is the correct answer.

Excalibur Company Sells Equipment for $20,000 Cash