On December 31, Strike Company sold one of its batting cages for $206,465. The equipment had an original cost of $242,900 and has accumulated depreciation of $36,435. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?
a. loss of $(36,435)
b. no gain or loss
c. gain of $48,580
d. can't be determined with data provided
Correct answer--------------b. no gain or loss
Working
The book value of equipment is equal to cash received on sale, hence there is neither gain or loss on sale.
Cost | $ 242,900.00 |
Accumulated depreciation | $ 36,435.00 |
Book value | $ 206,465.00 |
Sales price | $ 206,465.00 |
Book value | $ 206,465.00 |
Gain /(loss) | $ - |
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