A company sells a plant asset that originally cost $360,000 for $120,000 on December 31, 2022.The accumulated depreciation account had a balance of $180,000 after the current year's depreciation of $30,000 had been recorded.The company should recognize a
A)$60,000 loss on disposal.
B)$40,000 gain on disposal.
C)$120,000 loss on disposal.
D)$120,000 gain on disposal.

Question

Quizplus · Accepted Answer

The book value of the asset is $180,000 ($360,000 cost - $180,000 accumulated depreciation). Selling it for $120,000 results in a $60,000 loss ($180,000 book value - $120,000 sale price).

A Company Sells a Plant Asset That Originally Cost $360,000