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a company sells an asset that originally cost $425000 for $125000 on December 31 2020. the...

a company sells an asset that originally cost $425000 for $125000 on December 31 2020. the accumulated depreciation account had a balance of $170000 after the current year's depreciation of $42500 had been recorded. what amount of gain or loss should the company recognize upon the disposal of the asset?

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Answer #1

Cost price of asset = $425,000

Accumulated depreciation = $170,000

Book value of asset at the time of sale = Cost price of asset- Accumulated depreciation

= 425,000-170,000

= $255,000

Sale price of asset = $125,000

Loss on disposal of asset =  Book value of asset at the time of sale - Sale price of asset

= 255,000-125,000

= $130,000

The company recognize upon the disposal of the asset = loss $130,000.

Kindly comment if you need further assistance. Thanks

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