Question - On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. The market values of these assets on that date were: land $80,000; building $200,000; equipment $120,000. Before the property could be used, XYZ Company had to spend $6,000 to put the equipment in working order.
The equipment was assigned a useful life of 15 years with a $12,000 residual value. The equipment will be depreciated using the straight-line method.
On January 1, 2025, XYZ Company decided the life of the equipment should be revised from 15 to 25 years with a residual value of $3,000 at the end of the 25 years.
On January 1, 2033, XYZ Company spent $28,000 to overhaul the equipment. This capital expenditure caused XYZ Company to change the life of the equipment from 25 years to 34 years with a residual value at the end of the 34 years being equal to $11,000.
On June 1, 2038, XYZ Company sold the equipment for $37,000 cash.
Calculate the amount of the loss recorded on the sale of the equipment. Enter your answer as a number (i.e., 2,000). Do not use a minus sign, decimals, or type the word loss after your answer.