If a fully depreciated asset with no residual value is "retired" to a junk yard without receiving any cash:
A)a gain on disposal will be recorded.
B)depreciation must be recorded 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

A gain on disposal results if the proceeds are greater than the book value;a loss on disposal results if the proceeds are less than the book value.Here the proceeds are zero and,since the asset is fully depreciated with no residual value,the book value is also zero.No gain or loss on disposal will be recorded.

If a Fully Depreciated Asset with No Residual Value Is