BFS Company sold an asset for $7,500 in cash.The asset had an historical cost of $30,000 and accumulated depreciation of $20,000 on the day it was sold.How much is the gain or loss on the sale?

Question

Quizplus · Accepted Answer

Gain or loss on the sale = Amount received - Book value

Amount received = $7,500
Book value = $30,000 - $20,000 = $10,000

Therefore, gain or loss on the sale = $7,500 - $10,000 = -$2,500

Since the book value is higher than the amount received, there is a loss of $2,500. So, the correct answer is C) $2,500 loss.

BFS Company Sold an Asset for $7,500 in Cash