On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $250,000 with an accumulated depreciation of $210,000. Depreciation has been taken up to the end of the year. Strike found a company that is willing to buy the equipment for $25,000. What is the amount of the gain or loss on this transaction?
A) Gain of $25,000
B) Loss of $15,000
C) Loss of $25,000
D) Cannot be determined

Question

Quizplus · Accepted Answer

The book value of the equipment is $40,000 ($250,000 - $210,000). Selling it for $25,000 results in a loss of $15,000 ($25,000 - $40,000).

On December 31, Strike Company Has Decided to Sell One