Question

On December 31, 2017, a company sells a plant asset that originally cost $375,000, receiving cash of $125,000. The accumulated depreciation account had a balance of $150,000 after the current year's depreciation of $37,500 had been recorded. The company should recognize a:

Answer 1

Answer:

A loss of $100,000.00

Explanation:

Plants details:

Original cost price: $375,000.00

Depreciation to date : $ 150,000.00

Selling price: $ 125,000.00

Calculating the book value:

=original price-depreciation

=$375,000.00-$150,000.00

=$225,000

Calculating profit and loss

= Selling price -book value

=$125,000- $ 225,000

=($100,000.00)

A loss of $100,000.00