Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000

Equipment was sold for $50,000. The equipment was originally purchased for $85,000. At the time of the sale, the equipment had accumulated depreciation of $30,000. Calculate the gain or loss to be recorded on the sale of equipment.

A) Gain of $20,000.

B) Loss of $5,000.

C) Loss of $35,000.

D) Gain of $5,000.

Answer: B

When a company reports a loss on the sale of a depreciable asset, which of the following is always true?

A) The company sold the asset for less than accumulated depreciation.

B) The company sold the asset for less than fair value.

C) The company sold the asset for less than book value.

D) The company sold the asset before the useful life was over.

Answer: C

When a company reports a gain on the sale of a depreciable asset, which of the following is always true?

A) The company sold the asset for more than its fair value.

B) The company sold the asset for more than its book value.

C) The company sold the asset before its useful life was over.

D) The company sold the asset for more than it was worth.

Answer: B