Final answer:
The question involves calculating the depreciation of an asset using the straight-line method over 15 months and determining the gain or loss upon its sale. After depreciating the asset for 15 months, the remaining book value is calculated, and subsequently, the loss from the sale is also determined.
Step-by-step explanation:
The subject of this question is related to the depreciation of an asset using the straight-line method and the calculation of gain or loss upon its sale. To calculate the depreciation expense, we use the formula:
Depreciation Expense = (Cost of Asset - Residual Value) / Useful Life
For this asset, the Depreciation Expense is calculated as (8500 EUR - 500 EUR) / 5 years = 1600 EUR per year. Considering 15 months of use, we can account for depreciation for 1.25 years (15 months / 12). Therefore, the total depreciation for the asset is 1600 EUR/year * 1.25 years = 2000 EUR.
Now, to calculate the book value of the asset at the time of sale, we subtract the accumulated depreciation from the original cost:
Book Value = Cost of Asset - Accumulated Depreciation
Book Value = 8500 EUR - 2000 EUR = 6500 EUR.
Finally, to calculate the gain or loss from the sale, subtract the book value from the sale price:
Gain/Loss = Sale Price - Book Value
Gain/Loss = 4700 EUR - 6500 EUR = -1800 EUR.
Hence, there is a loss of 1800 EUR from the sale of the asset.