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.
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:
|Correct answer is option b.|
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from Financial Accounting: Help and ReviewChapter 5 / Lesson 14