A truck costing $79,000 and on which $67,000 of accumulated depreciation has been recorded was...

Question:

A truck costing $79,000 and on which $67,000 of accumulated depreciation has been recorded was discarded as having no value. The entry to record this event would include

a) a credit to Accumulated Depreciation for $67,000.

b) loss of $12,000.

c) gain of $12,000.

d) credit to Accumulated Depreciation for $79,000.

Loss:

When the cost an item is more than the accumulated depreciation in that cost when its sold in the open market, is known as the loss and this will be reported in the income statement.

Answer and Explanation:

Calculationof Gain or Loss:

Particulars Amount ($)
Cost 79,000
Accumulated Depreciation 67,000
Loss 12,000
Correct answer is option b.


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How to Calculate Depreciation Expense: Definition & Formula

from Financial Accounting: Help and Review

Chapter 5 / Lesson 14
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