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 $55,000. What is the amount of the gain or loss on this transaction?
A) Cannot be determined
B) No gain or loss
C) Gain of $ 5,000
D) Gain of $55,000

Question

Quizplus · Accepted Answer

The book value of the equipment is $310,000 - $260,000 = $50,000. The selling price is $55,000, resulting in a gain of $55,000 - $50,000 = $5,000.

On December 31, Strike Company Has Decided to Sell One