On December 31, 2022, Cee Corp.sells an asset that originally cost $300,000 for $75,000.The company recognized a loss on disposal of $25,000.What was the balance of the accumulated depreciation account after the current year's depreciation of $15,000 was recorded?
A)$ 25,000 gain
B)$ 25,000 loss
C)$125,000 gain
D)$125,000 loss

Question

Quizplus · Accepted Answer

The balance in the accumulated depreciation account can be calculated by understanding that the loss on disposal indicates the book value of the asset was $25,000 more than the selling price. Given the asset sold for $75,000, its book value was $100,000. Since the original cost was $300,000, and the book value at disposal was $100,000, the accumulated depreciation must be $200,000 ($300,000 original cost - $100,000 book value). The current year's depreciation of $15,000 is included in this accumulated depreciation, indicating it was already accounted for in reaching the $200,000 total accumulated depreciation.