Use the Information Below to Answer the Following Questions

Multiple Choice

Use the information below to answer the following questions:
Tanner Ltd purchased an item of equipment on the first day of the financial period, 1 July 2010, for $200 000. The equipment was depreciated using the reducing balance method and a rate of 40%. It was sold on 1 July 2012.
-If the machine was sold for $65 000,what was the gain or loss on disposal?

A) gain of $14 000
B) gain of $10 000
C) loss of $7000
D) gain $7000.