A company is selling used office equipment for $12,000. • They purchased it 2...
A company is selling used office equipment for $12,000.
• They purchased it 2 years ago for $50,000.
• It was expected to have a useful life of 5 years.
• They use straight line depreciation.
What is the gain or loss on the sale?
SELECT ONLY ONE
-$28,000
-$18,000
$30,000
$38,000
$45,200
Homework Answers
Answer: Option ( B ) -$18,000
Explanation:
Depreciation of equipment = ($50,000 - 0) / 5 = $10,00 per year
Value of asset after two year = $50,000 - $20,000 = $30,000
Loss on selling asset = $12,000 - $30,000 = - $18,000
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