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Part 1

Taylor

Company purchased a machine for

$9,800

on January 1,

2019.

The machine has been depreciated using the straight-line method assuming it has

a five-year

life with a

$1,400

residual value.

Taylor

sold the machine on January 1,

2021,

for

$7,600.

The book value as of December 31,

2020

is

$6,440.

What gain or loss should

Taylor

record on the sale?