Ontario Ltd

question 50

Multiple Choice

Ontario Ltd. purchased a machine on Jan 1, 2010 for $750,000. The machine had an estimated useful life of 5 years and an estimated residual value of $50,000. The company uses straight-line depreciation and records monthly depreciation. The machine was sold on December 31, 2013 for $200,000. What was the gain/loss on disposal of the machine?

• A)$10,000 loss.
• B)$10,000 gain.
• C)$50,000 loss.
• D)$50,000 gain.

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Definitions:

Time Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.