A machine is purchased on July 1, 2009, for $170,000. It has an expected useful life of

Question:

A machine is purchased on July 1, 2009, for $170,000. It has an expected useful life of 10 years and no salvage value. After eight years, the machine is sold for $36,000 cash. What is the gain or loss on the sale? Discuss.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...