Summit Manufacturing sold machinery that it purchased for $250,000 three years ago. The company initially paid $75,000 down and took out a note payable for $175,000. At the time of sale, accumulated depreciation was $156,000, and Summit had paid $45,000 in principal on the note. The buyer paid $60,000 cash, gave a $90,000 note receivable, and assumed Summit's remaining $130,000 note payable. Calculate Summit's realized gain or loss on the sale.
Summit Manufacturing sold machinery that it purchased for $250,000 three years ago. The company initially paid $75,000 down and took out a note payable for $175,000. At the time of sale, accumulated depreciation was $156,000, and Summit had paid $45,000 in principal on the note. The buyer paid $60,000 cash, gave a $90,000 note receivable, and assumed Summit's remaining $130,000 note payable. Calculate Summit's realized gain or loss on the sale.
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 80IIP
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Transcribed Image Text:Summit Manufacturing sold machinery that it purchased
for $250,000 three years ago. The company initially paid
$75,000 down and took out a note payable for $175,000.
At the time of sale, accumulated depreciation was
$156,000, and Summit had paid $45,000 in principal on
the note. The buyer paid $60,000 cash, gave a $90,000
note receivable, and assumed Summit's remaining
$130,000 note payable. Calculate Summit's realized gain
or loss on the sale.
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