Pete Sells Equipment for $15,000 to Marcel,his Son

question 102

Essay

Pete sells equipment for $15,000 to Marcel,his son.The equipment cost $20,000 and has accumulated depreciation of $12,000.Marcel will use the equipment in his business.
a.What is the amount and character of Pete's gain on the sale?
b.How does your answer change if the sales price is $22,000?

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