Question

a fixed asset with a cost of $30,012 and accumulated depreciation of $27,010.80 is sold for $5,102.04. what is the amount of the gain or loss on disposal of the fixed asset?

Answer 1

The gain on the disposal is $2,100.84.

To calculate the gain or loss on the disposal of a fixed asset, you can use the following formula:

Gain or Loss=Selling Price−(Original Cost−Accumulated Depreciation)

In this case:

Gain or Loss=5,102.04−(30,012−27,010.80)

Gain or Loss=5,102.04−3,001.20

Gain or Loss=2,100.84

Since the result is positive, it indicates a gain on the disposal of the fixed asset. Therefore, the gain on the disposal is $2,100.84.