An asset that costs $14,400 and has accumulated depreciation of $8,000 is sold for $5,600.What amount of gain or loss will be recognized when the asset is sold?
A)A gain of $800.
B)A loss of $800.
C)A loss of $2,400.
D)A gain of $2,400.

Question

Quizplus · Accepted Answer

The asset's book value (cost - accumulated depreciation) is $6,400 ($14,400 - $8,000). Since the selling price of $5,600 is less than the book value, a loss will be recognized. The amount of the loss is $800 ($6,400 - $5,600). Therefore, choice B is correct.

An Asset That Costs $14,400 and Has Accumulated Depreciation of $8,000