[Aug82]

ABC purchases a copier for 30,000. ABC estimates useful life and salvage value are for 10 years and 6,000. ABC uses straight line depreciation method for accouting. After 4 years, the machine is sold for 17,000. What gain or loss should be record and how?

[MaggieMouse]

Compare the net book value with sold price at the time of the sale.

Dr. cash, accumulated depreciation
Cr. Asset
Dr loss or Cr gain

[justwonder2]

Machine cost: 30,000
Minus Salvage: 6000
Balance: 24,000

Straight line method of depreciation means that every year the amount of the depreciation is the same, so:
24,000/ 10 years = $2,400 depreciation expense for one year
$2,400 * 4 years = $9,600 total accumulated depreciation for 4 years.

The value of the machine after 4 years is: 24,000 - 9,600 = $14,400.

Sold for $17,000 so you have a gain of $2,600 on the sale of the machine.

$17,000 - $14,400 = $2,600.

Hope this helps

[MaggieMouse]

To get net book value should use cost minus accumulated depreciation, which is $20,400, loss of $3,400.