Question

A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an): Multiple Choice $800 loss. $0 gain or loss. $8,000 loss. $7,200 loss. $800 gain.

Answer 1

The correct answer is $800 loss.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Purchased Amount = $18,000

Accumulated depreciation = $17,200

So, we can calculate the book value by using following formula:

Book value = Purchased Amount - Accumulated depreciation

By putting the value in the formula, we get

$18,000 - $17,200 = $800

So, if company discarded the computer system, Then

Book value of computer system = Loss to the company

Hence, Company Loss = $800