A County Acquires Equipment for $500,000, for Use for a Community

Multiple Choice

A county acquires equipment for $500,000, for use for a community program, reported in an enterprise fund. The equipment has a 5-year life, no residual value. After 3 years, the equipment is sold for $275,000. Straight-line depreciation is used if appropriate. How is the sale reported in the enterprise fund's operating statement?

A) Other financing source, $275,000
B) Revenue, $275,000
C) Gain on sale, $75,000
D) Loss on sale, $225,000