The gain or loss on the disposal of equipment is determined by:
A) subtracting the book value of the old equipment from the cost of the new equipment
B) adding the disposal value and the book value of the old equipment
C) subtracting the book value from the cash received for the old equipment
D) adding the book value of the old equipment to the cost of the new equipment

Question

Quizplus · Accepted Answer

The gain or loss on the disposal of equipment is calculated by subtracting the book value of the equipment from the cash received upon its disposal. If the cash received is greater than the book value, there is a gain; if it is less, there is a loss.

The Gain or Loss on the Disposal of Equipment Is