On January 1,2012,a company sold a machine for $5,000 that it had used for several years.The machine cost $11,000,and had accumulated depreciation of $4,500 at the time of sale.What gain or loss will be reported on the income statement for the sale of the machine?

Question

Quizplus · Accepted Answer

The gain or loss is calculated by subtracting the book value of the asset from the selling price. The book value of the machine is $6,500 ($11,000 cost - $4,500 accumulated depreciation). The selling price is $5,000. Therefore, there is a loss of $1,500 ($5,000 selling price - $6,500 book value).

On January 1,2012,a Company Sold a Machine for $5,000 That