If a plant asset is retired before it is fully depreciated and the salvage value received is less than the asset's book value
A) a gain on disposal occurs.
B) a loss on disposal occurs.
C) there is no gain or loss on disposal.
D) additional depreciation expense must be recorded.

Question

Quizplus · Accepted Answer

When a plant asset is retired before it is fully depreciated and the salvage value received is less than the asset's book value, it results in a loss on disposal. This is because the asset is being sold for less than its carrying amount, which is the book value minus accumulated depreciation. The loss on disposal is calculated as the difference between the book value and salvage value.

If a Plant Asset Is Retired Before It Is Fully