Intermediate Accounting I

13. On 10/1/19, Aleph Corp purchased equipment for $120,000. The equipment had an estimated salvage value of $20,000 and an estimated useful life of 5 years. Aleph uses the double declining balance method of depreciation. On 1/1/21, after using the equipment for 1 year and 3 months, Aleph sold it for $40,000. How much was the gain or loss on the sale?

a) $4,000 gain

b) $3,200 loss

c) $14,000 loss

d) $24,800 loss