For financial reporting purposes,the gain or loss on the sale of a plant asset is determined by comparing the asset's:
A)cost with its book value.
B)sales price with its book value.
C)tax basis with its book value.
D)sales price with its tax basis.

Question

Quizplus · Accepted Answer

For financial reporting purposes, the gain or loss on the sale of a plant asset is determined by comparing the asset's sales price with its book value. Book value is the asset's cost minus accumulated depreciation. Therefore, the book value represents the asset's carrying amount on the company's balance sheet. The sales price is the amount received by the company for the sale of the asset. The gain or loss is calculated by subtracting the book value from the sales price. If the sales price is greater than the book value, a gain is recognized. If the sales price is less than the book value, a loss is recognized.

For Financial Reporting Purposes,the Gain or Loss on the Sale