Rudolf Snow Systems purchased land and building on January 1, 2003 for a combined price of $285,000. Rudolf allocated 75% of the purchase price to the building and 25% to the land to approximate their individual fair values. The building was depreciated using the double diminishing-balance and accumulated depreciation to date was correctly computed as $190,000. The land and building was subsequently sold on June 18, 2017 for a combined price of $650,000. What gain or loss on disposal of these assets would be reported in 2017?
A) gain of $95,000
B) gain of $555,000
C) gain of $578,750
D) gain of $626,250

Question

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The Answer of Rudolf Snow Systems purchased land and building on January 1, 2003 for a combined price of $285,000. Rudolf allocated 75% of the purchase price to the building and 25% to the land to approximate their individual fair values. The building was depreciated using the double diminishing-balance and accumulated depreciation to date was correctly computed as $190,000. The land and building was subsequently sold on June 18, 2017 for a combined price of $650,000. What gain or loss on disposal of these assets would be reported in 2017?
A) gain of $95,000
B) gain of $555,000
C) gain of $578,750
D) gain of $626,250

Rudolf Snow Systems Purchased Land and Building on January 1