Question

Vango, Inc. sold its van for $6,000 cash. The van's original cost was $40,000, and its Accumulated depreciation was $32,000. When recording the sale, Vango should record a ______.

Answer 1

Loss on disposal of $2,000

Step-by-step explanation:

Since the Van's original cost the amount of $40,000 in which the van was sold for $6,000 cash while the Accumulated depreciation was the amount of $38,000 which means that when recording the sale of the Vango, Inc should record a LOSS ON DISPOSAL of the amount of $2,000 calculated as:

Loss on disposal=Original cost -(Accumulated depreciation+Cash

Loss on disposal=$40,000-($32,000+$6,000)

Loss on disposal=$40,000-$38,000

Loss on disposal =$2,000

Therefore Vango, Inc should record a LOSS ON DISPOSAL of $2,000