A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2018.The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:
A)$100,000 loss on disposal.
B)$40,000 gain on disposal.
C)$40,000 loss on disposal.
D)$25,000 loss on disposal.

Question

Quizplus · Accepted Answer

Cost - Accumulated depreciation = Net book value $200,000 - $110,000 = $90,000
Selling Price - Net book value = Gain/loss on sale
$50,000 - 90,000 = ($40,000)Loss.

A Company Sells a Long-Lived Asset That Originally Cost $200,000