On December 31, Strike Company Has Decided to Sell One

question 84

Multiple Choice

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $55,000. What is the amount of the gain or loss on this transaction?

• A) Cannot be determined
• B) No gain or loss
• C) Gain of $25,000
• D) Gain of $55,000

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Definitions:

Common Stock

A type of corporate equity ownership, representing a portion of the stake in a company.

Market Price

The current price at which an asset or service can be bought or sold in a particular market.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned into cash within a specific period.

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights.