Answer :
Answer:
Gain = $400,000
Explanation:
The capital gain or loss from the sale of building can be computed as follows,
Purchase price = 600,000
Depreciation = 200,000
Sale price = 800,000
Gain/Loss = Sale price - (Purchase price - depreciation )
Gain = 800,000 - (600,000 - 200,000)
Gain = $400,000
The building is sold for $400,000 more than its net book value.
Hope that helps.
Answer:
Amount is $400,000. It is a gain on disposal.
Explanation:
Cost = $600,000
Accumulated depreciation = $200,000
Net book value = $600,000 - $200,000
= $400,000
Sales proceed = $800,000
Gain/loss on disposal = Sales proceed - Net book value
= $800,000 - $400,000
= $400,000
Amount is $400,000. It is a gain on disposal.