Nicklaus Company has decided to sell one of its old machines on June 30, 2011.The machine was purchased for $120,000 on January 1, 2007, and was depreciated on a straight-line basis for 10 years with no residual value.If the machine was sold for $39,000, what was the amount of the gain or loss recorded at the time of the sale?

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The machine was depreciated by $12,000 per year ($120,000/10 years). By June 30, 2011, 4.5 years of depreciation had occurred, totaling $54,000. The book value at the time of sale was $66,000 ($120,000 - $54,000). The machine was sold for $39,000, resulting in a loss of $27,000 ($66,000 - $39,000).

Nicklaus Company Has Decided to Sell One of Its Old