Maxwell Corporation wishes to sell a building it has owned for five years. It was purchased for $430,000. Maxwell performed additional modifications to the building, which totaled $45,000. On the proposed date of sale, the accumulated depreciation on the building totaled $75,000.
The proposed sales price of the building is $380,000. Maxwell is trying to determine the income statement effect of this transaction.
What would be Maxwell’s gain or loss on this sale?
1. $20,000 loss
2. $25,000 gain
3. $50,000 loss
4. $95,000 loss