Sunshine LLC sold furniture for $75,650. Sunshine bought the furniture for $89,870 several years ago and has claimed $24,935 of depreciation expense on the machine. What is the amount and character of Sunshine's gain or loss

The gain is $10,715

Explanation:

Solution

Given that:

The cost of furniture = $89,870

Accumulation of depreciation = $24,935

Thus

The book value of furniture = $89,870 - $24,935

=$64,935

The sale value of the furniture = $75,650

Now,'

The gain on sale of the furniture is given below:

Gain on sale of furniture = sale price - book value

= $75,650 - $64,935

=$10,715

The gain is The long term capital gain on sale of furniture is $10,715