Question

The Tarkin Corporation recently sold a plant asset for $12,000 that originally was purchased for $16,000. At the time of the sale, the plant asset had accumulated depreciation of $3,000. This sale would result in a   

1.     [ Select ] ["Gain on Disposal of Plant Assets", "Loss on Disposal of Plant Assets*"] of                             [ Select ] ["$9,000", "$1,000*", "$12,000", "$13,000", "$16,000"] .

Answer 1

Loss on Disposal of Assets - $1000

Why Not Other Options?

Particulars		Amount
Sale Proceeds		$ 12000
Purchase price of the plant asset	$16,000
Less: Accumulated Depreciation	$3,000
Carrying Amount of Plant Asset		$13,000
Loss on Disposal of Asset		($1000)

Calculation of Gain or Loss on Disposal of Asset:

The original purchase price of the asset, minus all accumulated depreciation and any accumulated impairment charges, is the carrying amount of the asset. Subtract this carrying amount from the sale price of the asset. If the remainder is positive, it is a gain. If the remainder is negative, it is a loss.

Therefore, Other options were not appropriate for the answer...