An asset that cost $64,000 was sold for $20,000 cash. Accumulated depreciation on the asset was
$41,000. The entry to record this transaction includes the recognition of:

Question

Quizplus · Accepted Answer

The asset was sold for $20,000 which is less than its book value ($64,000 - $41,000 = $23,000). So, there is a loss on the sale of the asset (i.e. the company did not recover the full cost of the asset). The amount of the loss is calculated as:
Cost of asset - Accumulated depreciation - Sale price
$64,000 - $41,000 - $20,000 = $3,000
Therefore, the entry to record this transaction includes a loss of $3,000.

An Asset That Cost $64,000 Was Sold for $20,000 Cash