On December 31, Strike Company traded-in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction? A. gain of 11,000B. no loss or gain will be recordedC. loss of 19,000D. loss of 11,000

Question

Business

Johanna Perry

6 May, 15:14

On December 31, Strike Company traded-in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction? A. gain of 11,000B. no loss or gain will be recordedC. loss of 19,000D. loss of 11,000

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Answers (1)

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Brendon Byrd · Answer 1

C. loss of 19,000

Explanation:

Old equipment cost = $215000 - $185000

= $30000

Loss = $30000 - $11000

= $19000 loss

Therefore, The amount of the gain or loss on this transaction is a loss of $19000.