Question

A company sells a plant asset which originally cost $374000 for $114000 on December 31, 2018....

A company sells a plant asset which originally cost $374000 for $114000 on December 31, 2018. The Accumulated Depreciation account had a balance of $147000 after the current year's depreciation of $31000 had been recorded. The company should recognize a

A)$113000 gain on disposal.

B)$82000 loss on disposal.

C)$113000 loss on disposal.

D)$260000 loss on disposal.

Business   Accounting   
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Homework Answers

Answer #1

Answer :- Calculation of Gain/Loss on disposal of plant asset :-

Carrying Value of the plant asset = Book Value - Accumulated Depreciation

Carrying value of the plant asset = $374,000 - $147,000

Carrying value of the plant asset = $227,000

Gain/(Loss) = $227,000 - $114,000

Loss on disposal = $113,000

So the Loss on disposal of plant asset is $113,000. Therefore the correct answer is option C.

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