A photocopy machine costs $95,000 when new and has accumulated depreciation of $88,000. Suppose the company junks this machine and receives nothing. What is the result of the disposal transaction?

Question

Quizplus · Accepted Answer

The loss is calculated as the original cost of the machine ($95,000) minus the accumulated depreciation ($88,000), resulting in a book value of $7,000. Since the machine is junked with no proceeds, the loss is $7,000.

A Photocopy Machine Costs $95,000 When New and Has Accumulated