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3 August, 19:43

Tulip Corporation purchased equipment for $ 54 comma 000on January 1, 2017. On December 31, 2019, the equipment was sold for $ 25 comma 000. Accumulated Depreciation as of December 31, 2019 was $ 28 comma 000. Calculate gain or loss on the sale.

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  1. 3 August, 21:17
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    Gain/loss = $1,000 loss

    Explanation:

    Giving the following information:

    Original price = $54,000

    Accumulated depreciation = $28,000

    Seling price = $25,000

    The gain or loss from selling an asset depends on the book value.

    Book value = original price - accumulated depreciation

    Book value = 54,000 - 28,000 = 26,000

    If the selling price is higher than the book value, the company gain from the sale.

    Gain/loss = 25,000 - 26,000 = $1,000 loss
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