contestada

On December 31, 2016, Hamilton Inc. sold a used industrial crane for $600,000 cash. The original cost of the crane was $5.0 million and its accumulated depreciation equaled $4.2 million on December 31, 2016. What is the gain or loss from the December 31, 2016 equipment sale?
A. $200,000 loss.
B. $200,000 gain.
C. $600,000 gain.
D. $600,000 loss.

Respuesta :

Answer: Option (A) is correct.

Explanation:

Given that,

Sold a used industrial crane = $600,000 cash

Original cost of the crane = $5.0 million

Accumulated depreciation = $4.2 million

Book value as on date of sales = Original cost - Accumulated depreciation

                                                    = $5.0 million - $4.2 million

                                                    = $0.8 million

                                                    = $800,000

Hence,

Loss on sales = Sales proceeds - Book value

                       = $600,000 - $800,000

                       = -($200,000)

 

Otras preguntas