A company sells a plant asset that originally cost $360,000 for $120,000 on December 31, 2021.The Accumulated Depreciation account had a balance of $144,000 after the current year's depreciation of $36,000 had been recorded.The company should recognize a

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To calculate the gain or loss on disposal of a plant asset, we need to compare the amount received from selling the asset to the net book value (original cost - accumulated depreciation) of the asset at the time of disposal. In this case, the net book value is $216,000 ($360,000 - $144,000), but the company sold the asset for only $120,000. Therefore, the company incurred a loss on disposal of $96,000 ($216,000 - $120,000), which should be recognized in the income statement.

A Company Sells a Plant Asset That Originally Cost $360,000