A gain will result when the cash received on the sale of property, plant, and equipment exceeds the carrying amount of the asset.

Question

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A gain is recognized when the cash received on the sale of an asset is greater than its carrying amount. This is because the carrying amount represents the net book value of an asset, which includes its historical cost, minus accumulated depreciation or amortization. When an asset is sold, any gain or loss is calculated as the difference between the sale price and the carrying amount. If the sale price exceeds the carrying amount, a gain is recognized.

A Gain Will Result When the Cash Received on the Sale