Question

An asset which costs $25,000 and has accumulated depreciation of $6,000 is sold for $11,000. What...

An asset which costs $25,000 and has accumulated depreciation of $6,000 is sold for $11,000. What amount of gain or loss will be recognized when the asset is sold?

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Homework Answers

Answer #1

Cost of the Asset = $25,000

Less: Accumulated depreciation = $6,000

Book value of the Asset = $19,000

Asset is sold for $11,000

Sale value < Book value of the asset, So it is a loss

Loss on sale of Asset = $19,000 - $11,000 = $8,000

Loss on sale of asset = $8,000

Answer = $8,000 Loss.

Additional explanation.

journal entry will be

Cash account..........................Debit $11,000

Accumulated depreciation.......Debit $6,000

Loss on sale of asset..............Debit $8,000

To Asset account.................Credit $25,000

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