Albatross Services scrapped a van. The van originally cost $40 000 and had accumulated depreciation of $38 000. What was the effect of scrapping the van?

Name: Albatross Services scrapped a van. The van originally cost $40 000 and had accumulated depreciation of $38 000. What was the effect of scrapping the van?
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Question

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The van's book value is $2,000 ($40,000 cost - $38,000 accumulated depreciation). Scrapping it with no residual value results in a loss of $2,000.

Albatross Services Scrapped a Van