Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 76

ACME, inc., uses straight-line depreciation for all of its depreciable assets. ACME sold a used piece of machinery on December 31, 2013, that it purchased on January 1, 2012, for $10,000. The asset had a five-year life, zero residual value, and Accumulated Depreciation as of December 31, 2013, of $4,000. If the sales price of the used machine was $7,500, the resulting gain or loss on disposal was which of the following amounts
A) Loss of $2,500
B) Gain of $3,500
C) Loss of $1,500
D) Gain of $1,500