Fundamentals of straight-line method of depreciation


On December 31, 2010, Stable Company sold a piece of equipment that was purchased on January 1, 2005. The equipment originally cost $820,000 and has an estimated useful life of eight years. Stable uses the straight-line method of depreciation. What is the gain/loss on the sale of equipment that Stable will recognize if the equipment was sold for $230,000?

a) $230,000 Gain

b) $25,000 Loss

c) $25,000 Gain

d) $73,750 Gain

e) $0; no gain or loss

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Accounting Basics: Fundamentals of straight-line method of depreciation
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