Ask Question
7 October, 22:43

Return to Amir's original purchase date of July1, 20X5. Assume that Amir uses straight-line method of depreciation and sells the equipment for $36,500 on July 1, 20X9. The result of the sale of the equipment is a gain (loss) of:

a. ($3,500)

b. $7,500

c. $2,500

d. $0

+2
Answers (1)
  1. 8 October, 00:45
    0
    This question doesn't seem to be complete however I'll try to answer it to the best of my knowledge.

    Firstly we must know the Original Purchase Price of the Asset. From the Original Purchase Price we will deduct the accumulated Depreciation and get the Net Book Value. From this Net Book Value the selling price of the Equipment will be deducted to calculate the Gain or Loss on the Sale of Equipment. I have given an example to demonstrate the scenario

    COST $120,000

    Straight Line Depreciation Rate (Annual) 15%

    Monthly Depreciation $1,500

    Accumulated Depreciation (4 years) $72,000

    Net Book Value $48,000

    Selling Price of Asset $36,500

    Gain on Sale of Asset $11,500
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Return to Amir's original purchase date of July1, 20X5. Assume that Amir uses straight-line method of depreciation and sells the equipment ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers