n 2014 CampCo purchased production machinery The seller of t

n 2014, CampCo purchased production machinery. The seller of the machinery was asking $425,000, and the appraised value of the machinery was $400,000. CampCo and the seller agreed on a price of $410,000. Now, in 2017, CampCo has accumulated depreciation of $210,000 on the machinery, and they sell it for $180,000. What is the amount of the gain or loss on the sale of the machinery?

Solution

Purchased amount of machinery = 410000

Accumlated dep on 2017 = 210000

Book value of machinery on 2017 = 410000-210000 = 200000

Sale price of machinery = 180000

Loss on sale of machine = 180000-200000 = -20000

So answer is d) loss of $20000