Martinez Owns an Asset That Cost $87,000 with Accumulated Depreciation

question 101

Multiple Choice

Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:

• A) A gain on sale of $2,000.
• B) A loss on sale of $45,000.
• C) A loss on sale of $5,000.
• D) A loss on sale of $2,000.
• E) A gain on sale of $5,000.

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Definitions:

American Independence

The historical event in which the thirteen colonies declared their independence from British rule in 1776, leading to the formation of the United States.

Railroad Industry

A sector focused on the operation of railroads and trains for the transport of goods and passengers.

Strategic Communication

The purposeful use of communication by an organization to fulfill its mission, involving the dissemination of messages to targeted audiences to influence their behavior or opinion.

Train Travel

A mode of transportation that involves traveling by rail, often distinguished by its efficiency and environmental friendliness.