Question
On November 4, 2017, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2017 and 2018, respectively,
On November 4, 2017, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2017 and 2018, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong percentages (i.e., those for 39-year rather than 27.5-year property). Blue should have taken $910 and $7,272 of cost recovery in 2017 and 2018, respectively. On January 1, 2019, the asset was sold for $180,000. Calculate the gain or loss on the sale of the asset for that year.
Note:
Please provide your answer on Word or Excel as handwritten solutions are usually hard to read
I would appreciate detailed explanations as to how to arrive at the correct answer
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