Final answer:
When an asset is sold, the asset's book value, which includes its original cost minus accumulated depreciation, is deducted from the asset class balance. The gain or loss on the sale is then calculated by comparing the sale proceeds to the book value.
Step-by-step explanation:
When an asset is sold, the amount that is deducted from the asset class balance is the asset's book value, which typically includes the original cost of the asset minus any accumulated depreciation. After the sale, the resulting gain or loss on the sale is calculated by subtracting the book value from the sale proceeds. If the proceeds exceed the book value, a gain is realized. Conversely, if the book value exceeds the proceeds, a loss is incurred. This transaction is recorded in the financial statements, affecting both the balance sheet and the income statement.