Computing the gain or loss on the sale of the asset

Reference no: EM13258368

On November 4, 2006, Blue Company acquired an asst(27.5-year residential real property) for $100,00 for use in itsbusiness. In 2006 and 2007, respectively, Blue took $321 and $2,256of cost recovery. These amounts were incorrect because Blue appliedthe wrong percentages ( i.e., those for 39-year rather than27.5-year). Blue should have taken $455 and $3,636 cost recovery in2006 and 2007. On January 1, 2008, the asset was sold for $98,000. Calculate the gain or loss on the sale of the asset in2008.

Reference no: EM13258368

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