On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $50,000. What is the amount of the gain or loss on this transaction?
A) Gain of $50,000
B) Loss of $50,000
C) No gain or loss
D) Cannot be determined

Question

Quizplus · Accepted Answer

The book value of the equipment is $310,000 - $260,000 = $50,000. Since the selling price is also $50,000, there is no gain or loss on the transaction.

On December 31, Strike Company Has Decided to Sell One