Question

the gain or loss from disposal of property, plant and equipment is the difference between an asset's book value and the value received.

True or False

TrueFalse

Answer 1

The property, plant and equipment is the tangible assets of the company and is showing on the assets side of the balance sheet. The book value is the difference between the cost and accumulated depreciation. On sale date, to calculate the gain or loss on sale, the book value is compared with the value received. If value received is higher than the book value, then there will be a gain on sale whereas if value received is less than book value, then there will be a loss on sale.

Hence, the given statement is correct answer.

That is given statement is true.

SUMMARY:

On sale date, to calculate the gain or loss on sale of property, plant and equipment, the book value is compared with value received.

Hence, the statement is true.