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18 April, 19:27

A copy machine cost $ 48 comma 000 when new and has accumulated depreciation of $ 31 comma 000. Suppose Kinko sold the machine for $ 17 comma 000. What is the result of this disposal transaction?

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  1. 18 April, 19:51
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    The result of the disposal transaction is neither a loss or a profit

    Explanation:

    The expression for the book value is as shown;

    B. V=P. C-A. D

    where;

    B. V=book value

    P. C=purchase cost

    A. D=accumulated depreciation

    In our case;

    B. V=unknown

    P. C=$48,000

    A. D=$31,000

    replacing;

    Book value=48,000-31,000=$17,000

    The profit or loss from the sale of the machine, can be expressed as;

    profit/loss=sales price-book value

    where;

    sales price=17,000

    book value=17,000

    profit/loss=17,000-17,000=0

    The result of the disposal transaction is neither a loss or a profit
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