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Managerial Accounting: Gain or loss on a Sale

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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?

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Solution Summary

The solution explains how to calculate the gain or loss on the sale of an asset.

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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 ...

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