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Sumner Sold Equipment That It Uses in Its Business for $30,000

question 41

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Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?


Definitions:

Warranty Expense

The cost associated with the obligation of a company to repair or replace its product if it is found to be defective within a certain period.

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