Lassen Corporation sold a machine to a machine dealer for $24,000. Lassen bought the machine for $52,000 and has claimed $20,500 of depreciation expense on the machine. What gain or loss does Lassen realize on the transaction

Gain/loss = $7,500 loss

Explanation:

Giving the following information:

Selling price = $24,000.

Lassen bought the machine for $52,000 and has claimed $20,500 of depreciation expense on the machine

First, we need to calculate the book value:

Book value = original price - accumulated depreciation

Book value = 52,000 - 20,500 = $31,500

If the selling price is higher than the book value, the company gain from the sale.

Gain/loss = 24,000 - 31,500 = $7,500 loss