An asset's undepreciated capital cost before sale is $6 588. The asset is sold for $4 551 and its original cost was $17 500. There is a terminal loss of $2 037 in this case.

Question

Quizplus · Accepted Answer

The terminal loss should be calculated as ($6,588 - $4,551) = $2,037, which is equal to the difference between the undepreciated capital cost before sale and the proceeds from the sale. Therefore, there is no terminal loss in this case.

An Asset's Undepreciated Capital Cost Before Sale Is $6 588