Slipper Company sold a productive asset,a machine,for cash.It originally cost Slipper $20,000.The accumulated depreciation at the date of disposal was $15,000.A gain on the disposal of $2,000 was reported.What was the asset's selling price?
A)$7,000.
B)$3,000.
C)$4,000.
D)$5,000.

Question

Quizplus · Accepted Answer

The book value of the asset at the time of sale is $20,000 (original cost) - $15,000 (accumulated depreciation) = $5,000. A gain of $2,000 indicates the selling price was $5,000 (book value) + $2,000 (gain) = $7,000.

Slipper Company Sold a Productive Asset,a Machine,for Cash