Answer:
Sumner had a loss of $9,750.
Step-by-step explanation:
Given:
Sumner sold equipment that it uses in its business for $30,200.
Sumner bought the equipment a few years ago for $79,900 and has claimed $39,950 of depreciation expense.
Now, to find the amount and character of Sumner's gain or loss.
Sumner sold equipment = $30,200.
Now:
Sumner bought equipment = $79,900.
And it had depreciation expenses = $39,950.
So, total cost of equipment after expenses = $79,900 -$39,950 = $39,950.
As we see the price of equipment purchased is more than the equipment sold.
Thus, it is a loss.
Now, to get the amount of loss we subtract the price of equipment purchased by the equipment sold:
Amount of loss = price at which equipment purchased - price of equipment sold.
[tex]Amount\ of\ loss=\$39,950-\$30,200[/tex]
[tex]Amount\ of\ loss=\$9,750[/tex]
Therefore, Sumner had a loss of $9,750.
