A piece of machinery cost $50,000.00 when purchased and has been depreciated half of its value. Assuming the machinery can be sold for $30,000.00, how much accounting profit does the machinery generate?
A)-$20,000.00
B)$5,000.00
C)$30,000.00
D)$25,000.00

Question

Quizplus · Accepted Answer

The machinery was depreciated to half of its original value, so its book value is $25,000.00 ($50,000.00 / 2). Selling it for $30,000.00 generates an accounting profit of $5,000.00 ($30,000.00 - $25,000.00).

A Piece of Machinery Cost $50,000