Albatross Services scrapped a van.The van originally cost $40,000,had an estimated salvage value of zero,and an estimated life of 10 years.At the time it was scrapped,it had accumulated depreciation of $40,000.What was the effect of scrapping the van?

Question

Quizplus · Accepted Answer

Since the van had already accumulated depreciation equal to its original cost, scrapping it would not result in any gain or loss. The total depreciation expense would be equal to the original cost, so there would be no difference in the company's financial statements.

Albatross Services Scrapped a Van