If a plant asset is retired before it is fully depreciated and no salvage or scrap value is received
A) a gain on disposal will be recorded.
B) phantom depreciation must be taken as though the asset were still on the books.
C) a loss on disposal will be recorded.
D) no gain or loss on disposal will be recorded.

Question

Quizplus · Accepted Answer

When a plant asset is retired before it is fully depreciated and no salvage or scrap value is received, a loss on disposal will be recorded. This loss is calculated by subtracting the asset's accumulated depreciation from its original cost. Since the asset is no longer contributing to the business's operations, the loss is recognized as an expense.

If a Plant Asset Is Retired Before It Is Fully