Question

Hampton purchased a machine two years ago for $5500. Over the last two years, Hampton has taken a total of $1900 of depreciation on the machine. Now, Hampton sells the machine for $2000 What is Hampton's gain or loss on this sale? (Input a gain as a positive number and a loss as a negative number)?

Answer 1

-$1600

Explanation:

The book value of the machine after 2 years is ...

$5500 - 1900 = $3600

If sold for $2000, the gain is ...

$2000 -3600 = -$1600

The company lost $1600 on the sale.