Question

Franco Company sold office furniture for $2400 cash. The furniture cost $70, 000 and had accumulated depreciation through the date of sale totaling $32, 000. The company will recognize: Select one:a.a gain of $35, 600.b.a loss of $38, 000.c.a loss of $35, 600.d.a gain of $38, 000.

Answer 1

c.a loss of $35, 600

Step-by-step explanation:

to know the gain/loss at disposal we should compare the book value with the sales price:

book value: historic cost - accumulated depreciation

70,000 - 32,000 = 38,000

proceeds from sale 2,400

loss for 35,600

As we are selling belowthe book value it will be a loss for the difference