On December 31, Strike Company sold one of its batting cages for $55,000. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. What is the amount of the gain or loss on this transaction?
A) loss of $55,000
B) loss of $5,000
C) gain of $5,000
D) gain of $55,000

Question

Quizplus · Accepted Answer

The equipment's book value is calculated as its initial cost ($310,000) minus accumulated depreciation ($260,000), which equals $50,000. Selling it for $55,000 results in a gain of $5,000 ($55,000 - $50,000).

On December 31, Strike Company Sold One of Its Batting