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Disposal of PP&E - Partial Years

FINACT-LL41RY

On March 1, 2011, Avery Fabrication, Inc. purchased equipment at a cost of \$510,000 and began using it in its operations. The equipment was estimated to have a useful life of 5 years, a salvage value of \$30,000, and was to be depreciated using the straight-line method. On June 1, 2013, Avery sold the machine for \$274,000.

What would be the amount of gain/loss that should be recorded by Avery on May 1, 2014?

A

Loss of \$20,000

B

Loss of \$44,000

C

Gain of \$52,000

D

Gain of \$274,000