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33. Rainbow Ltd has control over Winnie Ltd. Rainbow sold an equipment to Winnie for...

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Accounting

33. Rainbow Ltd has control over Winnie Ltd. Rainbow sold an equipment to Winnie for $3,000,000 in January 20X5. The equipment was 3 years old when sold, and had cost Rainbow $4,500,000 to buy, with expected residual value $500,000. The residual value and remaining useful life of the equipment did not change. The equipment had been depreciated by Rainbow at 10% p.a. straight-line. The amount of the unrealised gain/loss on the sale was:

Select one:

A. $700,000 gain

B. $300,000 loss

C. $1,500,000 loss

D. $500,000 gain

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