The John Company Purchased a Machine on November 1, 2002

question 5

Multiple Choice

The John Company purchased a machine on November 1, 2002, for $148,000. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $4,000. John has recorded monthly depreciation using the straight-line method. On July 1, 2011, the machine was sold for $13,000. What should be the loss recognized from the sale of the machine?

• A) $4,000
• B) $5,000
• C) $10,200
• D) $13,000

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