A Firm Had a Piece of Machinery That Cost $7,000

question 47

Multiple Choice

A firm had a piece of machinery that cost $7,000 when new and has accumulated $4,500 in depreciation. If the machine is sold for $4,000, which of the following is true?

• A)The firm has a taxable gain of $4,000 on the sale of the machine
• B)The firm has a taxable gain of $1,500 on the sale of the machine
• C)The firm has a deductible loss of $3,000 on the sale of the machine
• D)The firm has a taxable gain of $7,000 on the sale of the machine

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