Harold Lynd Corporation sold equipment with an original cost of $90,000 for $55,000 cash and recorded a gain of $5,000.What was the book value of the equipment on the date of the sale?

Question

Quizplus · Accepted Answer

The book value of the equipment was $50,000. This is calculated by subtracting the gain of $5,000 from the sale price of $55,000. Since a gain occurs when the sale price exceeds the book value, the book value must have been $50,000 ($55,000 - $5,000).

Harold Lynd Corporation Sold Equipment with an Original Cost of $90,000