A company sells a plant asset which originally cost $360000 for $120000 on December 31 2017. The Accumulated Depreciation account had a balance of $144000 after the current year's depreciation of $36000 had been recorded. The company should recognize a

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Quizplus · Accepted Answer

To calculate the gain or loss on disposal of an asset, we need to compare the net book value (NBV) of the asset (original cost - accumulated depreciation) with the sale price. In this case, the NBV is $360,000 - $144,000 = $216,000. Since the sale price of $120,000 is less than the NBV, there will be a loss on disposal. The loss on disposal is calculated as the difference between the NBV and the sale price, which is $216,000 - $120,000 = $96,000. Therefore, the answer is C.

A Company Sells a Plant Asset Which Originally Cost $360000