Moran owns a building he bought during year 0 for $179,000. He sold the building

Question

Moran owns a building he bought during year 0 for $179,000. He sold the building in year 6. During the time he held the building he depreciated it by $47,000.

What is the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable.)

a. Moran received $161,000.

b. Moran received $201,000.

c. Moran received $119,000.

Explanation / Answer

a.

b.

c.

Sale value $ 161,000 Less: Book value of the building Cost of the building $ 179,000 Less: Accumulated depreciation $    47,000 Book value of the building $ 132,000 Gain on sale of building $    29,000

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