Answer:
The correct answer is B: gain $5000
Explanation:
Giving the following information:
On January 1, 2016, = commercial truck for $48,000.
straight-line depreciation method.
useful life of eight years.
residual value of $8,000.
On December 31, 2017, Jacob Inc. sold the truck for $43,000.
Depreciation expense per year= (Purchase value - residual value)/8
Depreciation expense per year= (48000-8000)/8=5000
Accumulated depreciation year 2= 5000*2= 10000
To calculate the gain or loss we need to use the following formula:
Gain/loss= price value - book value
Gain/loss= price value - (purchase price - accumulated depreciation)
Gain/loss= 43000 - (48000- 10000)= 5000 gain
