On May 1, 2011, Pinkley Company sells office furniture for €90,000 cash.The office furniture originally cost €225,000 when purchased on January 1, 2004.Depreciation is recorded by the straight-line method over 10 years with a residual value of €22,500.What gain should be recognized on the sale?

Question

Quizplus · Accepted Answer

The book value of the furniture on May 1, 2011, is €22,500. The gain is calculated as the sale price (€90,000) minus the book value (€22,500), resulting in a gain of €67,500.

On May 1, 2011, Pinkley Company Sells Office Furniture for €90,000