Albert Corp. bought a machine for $10,000 thirteen years ago. It has been depreciated on a straight line basis over a 20 year life with no salvage value. The firm just sold the machine for $6,000. How much gain/loss should be reported on the sale?

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The machine was depreciated over 20 years with no salvage value, meaning it depreciated $500 per year ($10,000 / 20 years). After 13 years, the total depreciation is $6,500 ($500 * 13 years), making the book value $3,500 ($10,000 - $6,500). Selling it for $6,000 results in a $2,500 gain ($6,000 - $3,500).