Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the...
Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:
A gain on sale of $5,000.
A gain on sale of $2,000.
A loss on sale of $2,000.
A loss on sale of $45,000.
A loss on sale of $5,000.
Homework Answers
Book value as on date of sale=Cost-Accumulated depreciation
=87,000-40,000=$47,000
Hence since sale proceeds is lesser than book value as on date of sale;
Hence loss =(47,000-42,000)=$5000
Hence the correct option is:
A loss on sale of $5,000.
Add Answer to:
Martinez owns an asset that cost
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