Question

A company sells a plant asset that originally cost $500000 for $225000 on December 31, 2017. The accumulated depreciation account had a balance of $200000 after the current year's depreciation of $50000 had been recorded. The company should recognize a

Answer 1

Answer and Explanation:

The computation is shown below:

Cost of Assets $500,000

Less: Accumulated Depreciation -$200,000

Net book value as on 31st Dec 2017 $300,000

Less: Amount realized after sale of an asset -$225,000

Loss from sale of asset $75,000

As the book value is $300,000 and the sale value of an asset is $225,000

so there is a loss of $75,000 from this given transaction