Sam Dairy sold a delivery truck for cash of 86,800. The original cost of the truck was $336,000, and a loss of $53,200 was recognized on the sale. The accumulated depreciation at the date of sale must have been:

Question

Quizplus · Accepted Answer

The formula for calculating the loss on the sale of an asset is:
Loss on sale = Original cost - Accumulated depreciation - Selling price

Therefore, we can rearrange the formula to find the accumulated depreciation:
Accumulated depreciation = Original cost - Selling price - Loss on sale
Accumulated depreciation = $336,000 - $86,800 - $53,200
Accumulated depreciation = $196,000

Therefore, the accumulated depreciation at the date of sale must have been $196,000.

Sam Dairy Sold a Delivery Truck for Cash of 86,800