On December 31,2013,Stable Company sold a piece of equipment that was purchased on January 1,2009.The equipment originally cost $820,000 and has an estimated useful life of eight years.Stable uses the double-declining-balance method of depreciation.What is the gain/loss on the sale of equipment that Stable will recognize if the equipment was sold for $230,000?

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The double-declining-balance method calculates depreciation by doubling the straight-line rate. The annual depreciation rate is 25% (100%/8 years x 2). Depreciation for each year is calculated on the book value at the beginning of the year. After calculating the accumulated depreciation over 5 years, the book value is subtracted from the sale price to determine the gain or loss. The book value at the time of sale is $194,590.50, resulting in a gain of $35,409.50 when sold for $230,000.

On December 31,2013,Stable Company Sold a Piece of Equipment That