Question

On December 31, Strike Company sold one of its batting cages for $206,465. The equipment had...

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

Business   Accounting   
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Answer #1

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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