Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $30,000, the company should record: Multiple Choice A gain of $10,000. A loss of $10,000. A loss of $35,000. No gain or loss.

Question

Julian Stone

Business

8 February, 10:31

Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $30,000, the company should record: Multiple Choice A gain of $10,000. A loss of $10,000. A loss of $35,000. No gain or loss.

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Answers (1)

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Zion Mercer · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Equipment originally costing $65,000 has accumulated depreciation of $25,000. The equipment is sold for $30,000.

An asset provides gain or loss depending if the selling price is higher or lower the book value.

Book value = Purchasing price - accumulated depreciation

Book value = 65,000 - 25,000 = $40,000

Gain or loss from selling the equipment = selling price - book value

Loss from selling the equipment = 30,000 - 40,000 = - $10,000