Skeen Company Paid $90,000 for Tangible Personalty Three Years Ago

Multiple Choice

Skeen Company paid $90,000 for tangible personalty three years ago and elected to expense and deduct the cost under Section 179. This year, Skeen sold the personalty for $52,700. Accumulated book depreciation through date of sale was $31,000. What is the effect of the sale on Skeen's book income and taxable income?

A) $6,300 book loss: $52,700 tax gain
B) $6,300 book loss; -0- tax gain
C) $6,300 book and tax gain
D) None of these choices are correct