A Business Machine Purchased April 10, 2015, for $98,000 Was

question 52

Essay

A business machine purchased April 10, 2015, for $98,000 was fully depreciated in 2015 using § 179 immediate expensing. On August 15, 2017, the machine was sold for $67,000. What is the amount and nature of the gain or loss from disposition of the machine?

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overhead incurred to convert raw materials into finished products.

Equivalent Unit

A concept used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.

Weighted-Average Method

A cost accounting method that calculates the cost per unit of inventory based on the average cost of all similar items in stock, regardless of purchase date.