Answer:
Butte's gain $7,800
Explanation:
To recognize gain or loss on disposal:
First, Butte calculates the carrying amount of the asset by using the original cost of the machine, minus all accumulated depreciation and any accumulated impairment charges.
Then, subtract this carrying amount from the sale price of the machine. If the remainder is positive, it is a gain and if the remainder is negative, it is a loss .
The carrying amount of the machine = $54,800 - $12,400 = $42,400
Sales price - The carrying amount of the machine = $50,200 - $42,400 = $7,800 >0
Butte recognizes gain on disposal $7,800
