Question

A company sold equipment that originally cost $260,000 for $130,000 cash. The accumulated depreciation on the equipment was $130,000. The company should recognize a:__________
A. $130,000 loss.
B. $0 gain or loss.
C. $65,000 loss.
D. $130,000 gain.
E. $65,000 gain.

Answer 1

Answer:

B. $0 gain or loss.

Explanation:

The computation of the company recognized in the given situation is shown below:

Equipment cost $260,000

Less: Accumulated depreciation -$130,000

Book value $130,000

And, the sale value is $130,000

Since the book value and the sale value are equivalent to each other that means there is no gain or loss

hence, the correct option is B

And all the other options are incorrect