A company purchased a trunk on Jan 1, 2002 for $40,000. The truck has an estimated life of 6 years and an estimated residual value of $4,000. The company used the straight-line method to depreciate the asset. On July 1, 2004, the truck was sold for $14,000 csh. What's the gain or loss on the sale?
We need to find the book value as on July 1 to find out the gain or loss.
The cost price is 40,000 and the residual value is 4,000. The ...
The solution explains how to calculate the gain or loss on the sale of an asset.