Corel Sales sold its old office furniture for $5,000. Its original cost was $10,000 and at the time of sale, it had accumulated depreciation of $7,000. What was the effect of the transaction?

Question

Quizplus · Accepted Answer

The original cost was $10,000 and the accumulated depreciation was $7,000, so the book value of the furniture was $3,000 ($10,000 - $7,000). Since the sale price of $5,000 is greater than the book value of $3,000, there is a gain on the sale of $2,000 ($5,000 - $3,000).

Corel Sales Sold Its Old Office Furniture for $5,000