On December 31, Strike Company traded in one of its batting cages for another one that has a cost of $546,370. Strike receives a trade-in allowance of $36,045. The old equipment had an initial cost of $267,000 and has accumulated depreciation of $226,950. 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?

Question

Business

Naomi Tate

2 June, 17:02

On December 31, Strike Company traded in one of its batting cages for another one that has a cost of $546,370. Strike receives a trade-in allowance of $36,045. The old equipment had an initial cost of $267,000 and has accumulated depreciation of $226,950. 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?

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Answers (1)

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Kylee Dudley · Answer 1

loss = $4,005

Explanation:

given data

cost = $546,370

allowance = $36,045

old equipment initial cost = $267,000

accumulated depreciation = $226,950

solution

we know that here Old equipment cost will be

Old equipment cost = $267,000 - $226,950

Old equipment cost = $40,050

and

Loss will be here

loss = $40,050 - $36,045

loss = $4,005