Exercise 7 (21 Points) A. In the current year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased a few years ago for $50,000, and when it was sold, it had accumulated depreciation of $20,000 and an adjusted basis of $30,000. For the current year, how should the gain or loss be treated? Show supporting computations and explain your answer. B. Elmer sold machinery used in his business for $20,000. The machinery originally cost $80,000 and had $45,000 of accumulated depreciation at the time of the sale. It is his only sale this year. a. What is the gain or loss on the sale of the machinery? b. is the gain or loss treated as capital or ordinary? Explain