A Machine That Cost $72,000 and on Which $52,000 of Depreciation

question 146

Essay

A machine that cost $72,000 and on which $52,000 of depreciation had been recorded was disposed of for $20,800.Indicate whether a gain or a loss should be recorded,and for what amount.

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Definitions:

Cost of Debt

The effective rate that a company pays on its current debt, calculated as the interest expense on the debt divided by the total debt.

Security Market Line

A line in the Capital Asset Pricing Model (CAPM) that represents the relationship between the expected return of a security and its systemic risk.

Systematic Risk

The risk inherent to the entire market or an entire market segment, influenced by factors such as economic, geopolitical, and financial events, which cannot be eliminated through diversification.

Expected Return

The anticipated return on an investment, factoring in the probability of various outcomes.