On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the above
On January 1, 2014, Tanaka, Inc. purchased equipment for $27,000. Tanaka uses straight-line depreciation and estimates a 10-year useful life and a $3,000 salvage value. On December 31, 2021, Tanaka sells the equipment for $14,200. In recording this sale, Tanaka should reflect: Select one: a. A $1,400 gain b. A $1,600 gain c. A $3,000 gain d. A $6,400 gain e. None of the above
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 32CE
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